Here's the Secret to Making Money in Stocks This Year
By Jeff Cox, CNBC.com Senior Writer
NEW YORK (CNBC) -- Forget all those squiggly up-and-down lines on the charts, because stock market investing has been easy in 2012: Just look for all the companies that did poorly last year and watch them grow.
In fact, the rise of 2011 losers has been one of the few clear patterns in stock picking this year.
Though dividends and domestic stocks have gotten a lot of chatter, the truth is that the theme has been a very simple form of rotation, with the top 10 performers on the S&P 500 this year averaging a 2011 loss of 15%.
More from CNBC
Wall Street's Big Concern: Can Ryan Help Romney Win?
What Happens If China Comes In for a Hard Landing?
Paul Ryan's Catholic Capitalism
- In the S&P 500's top 25, the average winner is up 61%, the average loser down 32.5%.
- Ownership by exchange-traded funds has played little role, with winners owned only slightly more often than losers.
- Dividends also haven't been much of a factor, with the average yield among the top 25 just 0.99%, compared to the 1.9% average for the 500.
- Mega-caps rule, with the average market capitalization rate, excluding Apple (AAPL) , at $18.4 billion "with plenty of +50 billion capitalization names in the mix." Smaller-caps dominate the bottom of the list.
- Sectors mean little either. "There are retailers at the top of the heap, and others at the bottom. Ditto for food companies, energy stocks, and household names in technology."
--Written by Jeff Cox for CNBC
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV