What Was The Best Stock To Buy The Year You Were Born? (2024)

The Social Security Administration just announced the top names for newborns (Olivia for girls and Liam for boys). But investors have a more profitable question: What was the top stock to buy the year you were born?

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A group of 15 stocks currently in the S&P 500, including consumer discretionary Tesla (TSLA), consumer staples Archer Daniels Midland (ADM), Leaderboard tech member Nvidia (NVDA) and IBD 50 materials company Nucor (NUE), dominate the ranks of stocks that have done best over all the years since 1965 through today, says an Investor's Business Daily analysis of data from S&P Global Market Intelligence and MarketSmith. The analysis assumes you (or your parents) bought the stock the year you were born and never sold. The gains exclude dividends and are calculated from the start of each birth year.

Additionally, the findings highlight the massive gains available to those willing to look for top stocks. But it also reveals important historical trends that apply now for S&P 500 investors looking to score big gains in the future.

It Pays To Participate In The Market

The S&P 500 endures difficult years, but over the long term, its wealth-making power is formidable.

However, just owning the S&P 500 since 1965 generated a gain of 4,858%. That's impressive on its own, turning $10,000 into $495,800 during those 56 years (excluding dividends). But that's nothing compared to the gains you'll get from owning the market's leaders. The S&P 500 stock you would wish you bought in 1965 and held onto is agricultural transportation and storage company, Archer Daniels Midland (ADM). Shares of that stock are up 41,666% since 1965. That means owning that stock turned $10,000 into $4.2 million.

But again, just taking part in the S&P 500 is important. All five current members of the S&P 500 still in the world's most popular index that had valid stock price quotes in 1965 have made investors money since then. Three the five lagged the S&P 500, true, but they're positive in that time.

And don't think if you miss a top stock the first time around, you should just give up. Eleven of the 15 S&P 500 stocks that topped the index, starting in one of the years from 1965, had a repeat performance at some point. For instance, if you missed buying Archer Daniels Midland in 1965, you got additional chances in the following three years to own the top stock from then. It's been the top-performing S&P 500 since 1966, 1967 and 1968.

S&P 500 Disruption Is Profitable

Another theme throughout the S&P 500's history is the powerful gains from betting on disrupters.

Electric-car maker Tesla is a classic example of this force in markets. Tesla is upending the entire automobile industry. It's also one of the few current S&P 500 members to dominate the index for many years and then to repeat at the top years later. Anyone who bought the stock in 2011 is up more than 12,000% since then. And its dominance continued for investors who bought in 2012 and 2013, too. But it turns out Tesla was not only ahead of its time disrupting the automobile industry, it was still underappreciated. It returned again in 2020 as the top stock to buy and hold since then. What should you know about owning Tesla now?

Similarly, Netflix came alive in the mid-2000s. Originally, it disrupted the video-rental business with DVDs ordered online and sent through the mail. Had you bought the stock in 2005, you'd be up more than 28,500% since then. And Netflix got a second wind as it disrupted and pioneered online streaming. It turned in top performances from 2006, 2007, 2008 and also 2010. But Netflix continues to be an S&P 500 stock many think will be disruptive in the future.

And some innovators blaze all new trails. Leaderboard member Nvidia in the mid-2000s found high-end graphics chips could revolutionize computing beyond just in video gaming. It was right, tapping new areas of growth like artificial intelligence. Investors who bought in 2014 are up more than 28,000%.

S&P 500 Winners Aren't Just About Technology

Meanwhile, disruption and big stock gains aren't limited to just technology-focused firms, though. Other sectors hold promise, too, although it might be out of sight unless you're closely following the market.

For example, Steelmaker Nucor was the S&P 500 stock to buy in the early 1970s. Gen Xers who bought the innovative steelmaker in 1969, for instance, are up north of 202,000% since then. Nucor, while not a household name, revolutionized the so-called minimill. It found a way to produce high-quality steel in more customized batches and at a lower cost than much larger companies. Nucor continues to innovate, landing it on the IBD 50 list of stocks now with top fundamentals and stock action.

Similarly, Monster Beverage was a monster stock for people who bought almost anytime during the mid-1990s through the early 2000s. If you bought in 1994, for instance, you're up more than 165,000% since then. The company, formerly called Hansen Natural, changed its name in 2012. The company made energy drinks the go-to drink for millennials. It now sells a dizzying array of brands ranging from Monster to NOS and Full Throttle.

Timing, though, is important. Brave investors in 1991 who bought into homebuilder NVR (NVR) amid the recession scored a gain for the record books. They're up more than 1.6 million percent from that point. That beats the gain of any year's best stock through now.

But again, the most important part is taking part.

Best Stock To Buy (And Hold) The Year You Were Born

Largest stock price gain among current S&P 500 members through now

Sources: IBD, S&P Global Market Intelligence, gains through May 7, 2021, excluding dividends

Follow Matt Krantz on Twitter @mattkrantz

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