It's been the best September in years for US stocks: the S&P 500 raced to the 5,760.92 level and achieved an ATH of 5,767.37 on 26 September. There is still the big BUT, the rising global unrest in the Middle East and the Ukraine-Russia war, which have not yet added any serious bad news for the stock market at time of writing.
The 50-day moving average of the S&P 500 is at 5,530.33, which was tested successfully in August/September and the market recovered. October will be a volatile month before the earnings season starts with all eyes on the Israel/Iran conflict. The bull market has a one year birthday this month as well.
An excellent year for US stock picking so far
This year has been a very successful year from a stock picking perspective: we started the USA column last September in 2023. My personal picks have enjoyed considerable success with few exceptions – here they are in order of the picks:
- September: Nvidia [NASDAQ:NVDA] +162.62%
- October: Skechers [NYSE:SKX] +38.58%
- November: Palantir Technologies [NYSE:PLTR] +109.11%
- December: General Dynamics [NYSE:GD] +23.32%
- January: Palo Alto Networks [NASDAQ:PANW] -1.49%
- February: Live Nation Entertainment [NYSE:LYV] +24.42%
- March: Meta Platforms [NASDAQ:META] +13.13%
- April: RTX Corp [NYSE:RTX] +21.16%
- August: Ralph Lauren [NYSE:RL] +23.87%
This is compared to the US S&P 500 index, from 4,514.87 to 5,738.59, up +27.07% on a one year basis (all data September 30th, 2024); since we started the column in September 2023, it goes to show that stock picking using fundamental research and analysis can pay off – and you can beat the market with some picks - three out of nine of my picks beat the market, but when equally weighted the three outperformers, lifted the average return to 46.08%, easily beating the S&P 500 index.
I am dropping my worst pick PANW at USD 335 with a small loss. I still like the sector, but after serious problems with Crowdstrike – I am out for now - bad timing and PANW priced to perfection in January.
When we further analyze my holdings in terms of market cap sizes, we have two megacaps (over USD 1 trillion) NVDA and META - there usually should not provide much upside, but with AI these two stocks have worked especially in this market.
There is one large cap (over USD 100 billion) RTX, and three mid-caps PLTR, GD and LYV. The rest are in the small cap bracket at less than USD 20 billion but higher than USD 10 billion) - RL and SKX. All four market cap sizes work in combination when picking stocks as proven last year.
I would prefer to pick stocks over USD 20 billion to less than USD 100 billion since these stocks will have more room to grow than megacaps or large stocks. The real small caps of less than USD 10 billion market cap are high risk, high reward stocks in my opinion. The higher the market cap, the more analysts are following them, thus there are fewer surprises on both sides of the trade. My portfolio is an active 100% growth portfolio with no dividend stocks chosen. I will continue to provide AT+ subscribers with a monthly report all actions in my column.
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