It's getting pretty ugly out there for the S&P 500. There are still places to make money — but if you're like most investors — you likely don't own much of them.
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Ten stocks in the S&P 500, almost entirely widely under-owned energy firms like Halliburton (HAL), Schlumberger (SLB) and Exxon Mobil (XOM), are up more than 12.5% from the S&P 500's closing peak on Jan. 3, says an Investor's Business Daily analysis of data from S&P Global Market Intelligence and MarketSmith.
Gains that big are hard to find this year. Less than a month into the year, the S&P 500 is already down 6.5%. And the SPDR Portfolio S&P Growth ETF (SPYG), chock full of the stocks driving the market in most of the past years, finally slipped into a correction. It's down 10% from the S&P 500's high. Investors lost more than $3.5 trillion just this month, says Wilshire Associates.
"It's been a rocky start to 2022 for investors," says Bespoke Investment Group. "We still have a ways to go in January, but the performance month-to-date ... is among the worst since ... back in the early 1980s."
Shunning Energy Is Hurting You Now
There's absolutely no surprise where S&P 500 investors are moving their money: Energy. But if you're like most people, you hardly own stocks in this winning sector.
Nine out of the 10 top-performing S&P 500 stocks from the index' high hail from the energy sector. And yet, energy is such a hated S&P 500 sector it's a tiny percent of many investors' portfolios. The energy sector only accounts for 3.3% of the most popular ETF in the world — ranking it a distant eighth among the 11 S&P 500 sectors. Energy is an even smaller holding, 2.4%, in the Dow Jones Industrial Average.
Some of the hate of S&P 500 companies is creating puzzling distortions in the market. Energy giant Exxon Mobil is valued at $309 billion — roughly half of computer chipmaker and ESG darling Nvidia (NVDA). Even so, Exxon Mobil is expected to make $22.6 billion in 2020, as much as Nvidia is seen in posting in revenue this fiscal year and double its profit.
But investors distaste of energy is reversing. Shares of Exxon Mobil are up more than 15% from the S&P 500's high. Should you buy Exxon Mobil stock now?
Looking At S&P 500 Energy
Owning S&P 500 energy stocks may be unpopular. But it's profitable. And some of the gains are well into double-digit percentages already this early in the year.
Halliburton, a Houston-based seller of equipment to the oil and gas industry, has seen its shares soar more than 17% from the S&P 500's peak. Investors are piling in ahead of what's expected to be a banner year for profit. Analysts think the company's profit will jump more than 60% in 2021 on nearly 5% higher revenue of $15.1 billion. The company reports 2021 results on Jan. 24.
And shares of Halliburton peer, Schlumberger are up more than 16% from the S&P 500's high. And its profit in 2021 is seen jumping more than 86% to an adjusted $1.27 a share. The company reports 2021 results on Jan. 21.
It's honestly hard to not make money on S&P 500 energy stocks this year. Not a single S&P 500 energy stock is down from the S&P 500's high.
And that ties into another trend: Many value stocks are making a powerful run. The only top 10 S&P 500 non-energy stock this year so far is another value stock: embattled video-game maker Activision Blizzard (ATVI). It's up more than 20% from the S&P 500's high thanks to a multi-billion buyout by Microsoft (MSFT).
Finding ways to sidestep the S&P 500's mounting pain is getting more difficult. More than 70% of the stocks in the S&P 500 are now down this year — and many by staggering amounts.
Maybe energy isn't looking so bad now.
Top S&P 500 Stocks From The Market's High
Energy stocks dominate top-performing stocks from the S&P 500's Jan. 3, 2022 closing high
| Company | Ticker | Stock % ch. from S&P 500 high | Sector |
|---|
| Activision Blizzard | (ATVI) | 21.3% | Communication Services |
| Halliburton | (HAL) | 17.3 | Energy |
| Schlumberger | (SLB) | 16.8 | Energy |
| ConocoPhillips | (COP) | 16.1 | Energy |
| Hess | (HES) | 15.9 | Energy |
| Exxon Mobil | (XOM) | 15.3 | Energy |
| Pioneer Natural Resources | (PXD) | 15.0 | Energy |
| EOG Resources | (EOG) | 13.5 | Energy |
| Phillips 66 | (PSX) | 12.9 | Energy |
| Occidental Petroleum | (OXY) | 12.5 | Energy |
| | | |
| SPDR S&P 500 ETF Trust | (SPY) | -6.5% | |
Sources: IBD, S&P Global Market Intelligence from Jan. 3, 2022 S&P 500 closing high to Jan. 20, 2022
Follow Matt Krantz on Twitter @mattkrantz
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FAQs
For every stock transaction, there must be a buyer and a seller. Because of the immutable laws of supply and demand, if there are more buyers for a specific stock than there are sellers of it, the stock price will trend up. Conversely, if there are more sellers of the stock than buyers, the price will trend down.
What are the 10 best stocks to buy right now? ›
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| Company (ticker) | Analysts' consensus recommendation score | Analysts' consensus recommendation |
|---|
| ServiceNow (NOW) | 1.49 | Strong Buy |
| Assurant (AIZ) | 1.50 | Strong Buy |
| Howmet Aerospace (HWM) | 1.50 | Strong Buy |
| Insulet (PODD) | 1.50 | Strong Buy |
21 more rowsWhen you sell a stock for a higher price than you paid, the proceeds from the sale will include your original investment plus your gains and minus any fees. If you sold your stock at a lower price than you paid, the proceeds will include your original investment minus your losses and any fees.
What is the fear of missing out in finance? ›
Fueled by social media, the FOMO syndrome is a negative sentiment that can lead to heavy losses for investors who jump on fads out of fear of missing out on an opportunity.
Do I lose my money if a stock is delisted? ›
Though delisting does not affect your ownership, shares may not hold any value post-delisting. Thus, if any of the stocks that you own get delisted, it is better to sell your shares. You can either exit the market or sell it to the company when it announces buyback.
Are billionaires selling off their stocks? ›
Top billionaires are selling significant amounts of stock, prompting questions about their motives. There is an increasing trend toward investing in defensive positions amid uncertain economic times. While tracking billionaires' moves can offer insights, it doesn't guarantee success for regular investors.
What stock is expected to skyrocket? ›
10 Best Growth Stocks to Buy for 2024
| Stock | Implied upside over June 24 close |
|---|
| Tesla Inc. (TSLA) | 25.9% |
| JPMorgan Chase & Co. (JPM) | 8.1% |
| Exxon Mobil Corp. (XOM) | 13.9% |
| Mastercard Inc. (MA) | 18.2% |
6 more rowsJun 25, 2024
Best S&P 500 stocks as of July 2024
| Company and ticker symbol | Performance in 2024 |
|---|
| Super Micro Computer (SMCI) | 188.2% |
| Nvidia (NVDA) | 149.5% |
| Vistra (VST) | 123.2% |
| Constellation Energy (CEG) | 71.3% |
6 more rowsThree stocks that bargain hunters may want to consider buying today are AbbVie (NYSE: ABBV), Verizon Communications (NYSE: VZ), and PayPal Holdings (NASDAQ: PYPL). Although these stocks have underperformed the markets this year, here's why you'll want to consider buying them, anyway.
At what age should you get out of the stock market? ›
There are no set ages to get into or to get out of the stock market. While older clients may want to reduce their investing risk as they age, this doesn't necessarily mean they should be totally out of the stock market.
If you don't sell, the price per share could either continue to decline or rise in value over time. But nonetheless, even if the price did in fact rise, it would need to rise significantly to offset the initial decline.
What happens if you sell a stock and nobody buys it? ›
When there are no buyers, you can't sell your shares—you'll be stuck with them until there is some buying interest from other investors. A buyer could pop in a few seconds, or it could take minutes, days, or even weeks in the case of very thinly traded stocks.
What is Gephyrophobia? ›
What is gephyrophobia? Gephyrophobia is the abnormal, persistent fear of crossing bridges. A specific phobia is an intense, irrational fear of something that poses little or no danger, according to the National Institute of Mental Health.
What is a Athazagoraphobia mean? ›
Athazagoraphobia is a fear of forgetting someone or something, as well as a fear of being forgotten. For example, you or someone close to you may have anxiety or fear of developing Alzheimer's disease or memory loss.
How rare is FOMO? ›
Four in ten young people reported FOMO sometimes or often. FOMO was found to be negatively correlated with age, and men were more likely than women to report it.
What happens to a stock when everyone sells? ›
If everyone were to sell, there is no market in that stock (or other assets) anymore until sellers and buyers find a price they are willing to transact at. When a stock is falling it does not mean there are no buyers. The stock market works on the economic concepts of supply and demand.
Do stocks go down because people sell? ›
If more people want to buy a stock (demand) than sell it (supply), then the price moves up. Conversely, if more people wanted to sell a stock than buy it, there would be greater supply than demand, and the price would fall.
Do 90% of people lose money in the stock market? ›
About 90% of investors lose money trading stocks. That's 9 out of every 10 people — both newbies and seasoned professionals — losing their hard earned dollars by trying to outsmart an unpredictable and extremely volatile machine.
What happens to all the money when the stock market crashes? ›
It doesn't actually go anywhere, as confusing as it may seem. While it appears that you're losing money during a market crash, in reality, it's just your stocks losing value. For example, say you buy 10 shares of a stock priced at $100 per share, so your total account balance is $1,000.
