Investing

10 Best Stocks to Boost Your Portfolio in the Second Half

The first half of 2022 was not the worst ever for equities, but it was bad enough. The S&P 500 posted its largest six-month loss since 1970, dropping 20.6%. The Nasdaq fell by 28.6%, its largest first-half loss since 2008, and the Dow Jones industrial average dropped 15.3%, its worst first-half loss since 1962.

Investors have been sticking cash under their mattresses or using it to buy Treasury notes in a not-quite-panicked flight to safety. BofA Global Research’s chief investment strategist Michael Hartnett reported a weekly inflow of $62.6 billion to cash in the past week, $2.4 billion to bonds (largest inflow in 14 weeks), $2.1 billion from gold (largest outflow since March 202) and a weekly outflow of $4.6 billion from equities. Hartnett wrote, “[The] [s]imple truth remains [that] H2 [is] most likely to be one of slowing growth & rising rates.”

He also believes that it is too early to anticipate that the Federal Reserve will begin cutting interest rates again in 2023. Markets are already pricing in rate cuts for next year, and the Fed’s target for core PCE inflation of around 2.6% is aggressive.

Hartnett also comments that the “bigger the outflow, [the] bigger the bounce.” Following the great financial crisis of 2008-2009, returns from the S&P 500 had risen by 28% six months after the March 2009 low point in equity inflows. After 12 months, returns were up 43%.

The trick is finding the equities that are going to do their part to repair investors’ portfolios. The following table shows 10 stocks that have outperformed the S&P 500, on average, in the final six months of a year over the past five years. The table data comes from Wilshire Associates, Investors Business Daily and S&P Global Market Intelligence.

Company Ticker YTD Change Sector Avg. 2H Performance
Qualcomm QCOM −28.8% Tech 25.7%
Paycom PAYC −32.5% Tech 23.7%
EPAM Systems EPAM −55.9% Tech 23.3%
Sherwin-Williams SHW −36.4% Materials 19.4%
Costco COST −15.7% Cons Staples 18.6%
Intuitive Surgical ISRG −44.2% Healthcare 18.1%
NextEra Energy NEE −17.0% Utilities 17.9%
Dover DOV −33.2% Industrials 17.8%
Amphenol APH −26.4% Tech 17.8%
Alphabet GOOGL −22.9% Comm Svcs 14.4%

There are four tech stocks on the list, perhaps no surprise given how badly beaten up the sector was in the first half of the year. The other six stocks on the list all came from different sectors.


Here are a few comments and interesting numbers on each of the 10.

Qualcomm

Qualcomm Inc. (NASDAQ: QCOM) got a bit of a boost last week after Apple’s efforts to build the iPhone maker’s own modem chip reportedly ended in failure. Qualcomm will continue to supply the chips through next year.

Sponsored: Find a Qualified Financial Advisor

Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to 3 fiduciary financial advisors in your area in 5 minutes. Each advisor has been vetted by SmartAsset and is held to a fiduciary standard to act in your best interests. If you’re ready to be matched with local advisors that can help you achieve your financial goals, get started now.