2024 S&P 500 Perfect Hindsight
2024 was an interesting year with continued strength in communication services and tech outpacing the other 9 sectors. On an equal-weighted basis, the “magnificent seven” were up 42.4% for the year. The equal-weighted S&P 500 underperformed the cap weighted index by an astounding 12.4% after underperforming by a similar number for 2023 (the big got bigger).
- If you bought the top 100 performing stocks in the S&P 500 on an equal weighted basis on Jan 2nd last year and held them through the year, you would have been up 63.5%, beaten the S&P 500 total return by almost 40% as well as the “magnificent seven” by over 21%.
- If you concentrated and picked the top 10 performing stocks on Jan 2nd, and again held them all year, you would have generated a total return of 162.8%, the most lopsided performance for the top 10 stocks in many years.
- 10 of the 11 S&P industry sectors were positive, expanding breadth from 2023 and a huge turnaround from 2022 when 10 of 11 were negative. Energy generated the third worst sector returns in 2023 following the second worst sector returns in 2023 (and best in 2022).
- If you picked the 100 worst performing stocks for the year, you would have to mark your portfolio down 22.6% (tough but nothing like 2022).
- If you only owned the worst 10 S&P 500 stocks for the year, you would have finished the year down 50.5% (marginally better than 2018 and 2015 but still brutal).
In 2024, the growth stock train stayed on track, and interest in artificial intelligence continued unabated.
Presidential election influence on the stock market is a hot topic on the financial stations. What we do know is that in the fourth year of a president’s term, the market has been up in 21 of the last 25 elections. Past performance, however, is no guarantee of future returns – including election years.
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Best wishes to all for a happy, healthy and prosperous 2024!
J. Douglas Newsome, CFA
Managing Director, Director of Research
Perkins Fund Marketing LLC