This has been a really rough year for some traders.
The stock market has had a volatile year, including bear market dips that have certainly tested investors’ resolve. However, when looking for the best stocks to buy right now, investors should focus on long-term performance rather than short-term volatility. To assist you, we’ve compiled a list of the best stocks in the S&P 500 based on one-year return.
Energy stocks are currently among the best performers. Despite a falling stock market, these stocks have continued to post solid gains over the last year.
| Symbol | Company Name | Price Performance (1 Yr) |
|---|---|---|
| FSLR | First Solar Inc. | 124.65% |
| STLD | Steel Dynamics Inc. | 78.68% |
| CEG | Constellation Energy Corp. | 62.88% |
| MPC | Marathon Petroleum Corp. | 58.73% |
| VLO | Valero Energy Corp. | 57.74% |
| LW | Lamb Weston Holdings Inc. | 51.50% |
| ACGL | Arch Capital Group Ltd. | 48.59% |
| PWR | Quanta Services Inc. | 48.15% |
| EPAM | Epam Systems Inc. | 48.09% |
Are these the Top Stocks to Invest in Right Now?
No, not always. Based on one-year performance, these are the best stocks in the S&P 500 right now. However, this does not imply that they are the best stocks to invest in. Even the pros haven’t mastered forecasting the future of today’s top-performing stocks. Furthermore, the best stocks for your portfolio may not be the best stocks for someone else’s portfolio.
For example, a young person looking to aggressively grow their retirement savings may gravitate toward growth stocks due to their high-risk, high-reward volatility. A retiree looking for passive income might prefer dividend stocks like dividend aristocrats, which have a stable track record of steadily increasing dividend payments over time.
How to Identify the Best Stocks to Invest In
Choosing good stocks for your portfolio takes some time, and you should look beyond performance metrics like the ones on this page. Yes, it’s a solidly positive sign if a stock can outperform during times of market volatility and broad market declines, as we saw in 2022. However, as previously stated, there are a number of other factors to consider.
Aside from your personal risk tolerance and the length of time you intend to invest, strategic investors conduct extensive research on a company before purchasing its stock. They do fundamental analysis, which involves looking at the company’s financial statements and figuring out how economic factors might affect how the stock does in the future.
Many investors also perform technical analysis on a stock, which involves analyzing historical price movements in order to forecast future price movements. If you want to take this route, we have detailed overviews of how to research stocks and read stock charts, as well as key terms to understand.
An Alternative to Chasing the Best Stocks
All of this sounds like a lot of work, and it is. Because picking stocks is so difficult, many investors turn to index mutual funds and exchange-traded funds, which pool a variety of stocks.
Individual stocks have a lot of power when combined into a diversified portfolio via index funds: Since 1928, the S&P 500 index, which includes approximately 500 of the largest publicly traded companies in the United States, has posted an average annual return of nearly 10%.
An S&P 500 index fund or ETF seeks to replicate the performance of the S&P 500 by investing in the index’s constituent companies. Similarly, investors can track the DJIA by purchasing an index fund linked to the index. If you want to cast a wider net, you can invest in a total stock market fund, which holds thousands of stocks.
The winners balance out the losers in index funds, and you don’t have to guess which is which. As a result, many financial advisors believe that low-cost index funds and exchange-traded funds should be the foundation of a long-term portfolio.
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