The 10 stocks that have performed the best since the market bottomed out in March

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The United States is officially in a recession, but the stock market doesn't seem to have noticed. Since bottoming out in late March, the market has experienced a massive rally and has climbed back within spitting distance of pre-pandemic levels.

Economic concerns around the coronavirus pandemic caused the market to fall almost 34% from its February highs. But since it hit its lowest point on March 23, things have turned around. During the 50-day stretch through June 4, the S&P 500 returned 37.7%, the largest 50-day rally in history.

There have been some bumps in the days since, though: On June 11, for example, the S&P 500 fell nearly 6% for its worst decline since March. Afterwards, though, the markets started rising again

Here are the 10 best-performing stocks of the market's recovery and their total returns from the March 23 market low until the end of the trading week on June 12:

  1. Apache Corporation: 219.5%
  2. Halliburton Company: 143.9%
  3. Lincoln National Corporation: 134.5%
  4. Diamondback Energy Inc.: 130.5%
  5. Noble Energy Inc.: 129.3%
  6. Marathon Petroleum Corporation: 120.3%
  7. Royal Caribbean Cruises Ltd.: 117%
  8. Norwegian Cruise Line: 112%
  9. MGM Resorts International: 109.5%
  10. Devon Energy Corporation: 107.1%

Some of these stocks were rebounding from dramatic lows. Hospitality companies, like MGM Resorts, Norwegian Cruise Line, and Royal Caribbean, were starting to recover after being devastated earlier this year. For example, Royal Caribbean shares were trading for more than $135 in January, but they fell as low as $19.25 per share on March 18. As of June 15, they'd climbed back to up to more than $60 per share. In this case, what looks like a winning performance amid the broader rally still doesn't even get investors close to pre-pandemic value. 

The same holds true for energy companies, including oil producers. Not long ago, oil prices had declined to unprecedented levels — and even dipped into negative territory. Prior to February, WTI crude oil prices were hovering at more than $50 per barrel, but in late April, prices briefly dropped to less than -$16 per barrel. As of mid-June, they're back up to more than $35 per barrel.

Why it's 'extraordinarily dangerous' to try and pick winners

Seeing huge returns and feeling like you've missed out on the rally may make you want to invest in energy and cruise ship companies, but experts say it's best to be cautious. Just because these stocks and sectors outperformed the market over a few months doesn't necessarily make them good long-term investments. 

"It's an extraordinarily dangerous" idea to try and time the market or pick winning companies or sectors in the markets, says David M. McInnis, principal and co-founder of investment advisory firm East Paces Group in Atlanta. Even during relatively calm times, investing in single stocks or individual companies entails significant risk, which is why most financial professionals suggest you invest in broad, diverse, and safer products like index funds

How to plan for stock market downturns

Video by Stephen Parkhurst

Now, McInnis says, stock picking is even riskier because the markets have been turbulent and could become more volatile as the year progresses. Although the market comeback has been swift, many Americans are still trying to get a handle on what's happening with the economy. 

"There is a disconnect between Wall Street and Main Street," Nela Richardson, investment strategist of Edward Jones, recently told Grow, indicating that the upward trajectory of the market may slow as the country contends with mounting deaths due to the coronavirus pandemic, a corresponding surge in unemployment, and most recently, Black Lives Matter protests

For now, the best course of action for the average investor, experts say, may be to ignore the noise and stick to a predetermined strategy or financial plan.

Stick to your strategy and financial plan

So far, 2020 has been full of surprises and unprecedented swings in the market. Just within the past six months, for example, investors have witnessed the end of a decade-long bull-run, followed by a quick descent into a bear market, and then a recovery for the record books.

It's enough to give even veteran traders and Wall Street professionals whiplash, let alone the average mom and pop investor. The important thing to do, financial professionals say, is to keep your eye on the horizon and try not to get caught up in beating the market day to day.

For some perspective, the S&P 500 is up around 5% in the past 12 months but about 45% in the past five years. "Markets can be pretty irrational over short-term time periods," says McInnis, adding that even after a massive rally like the market experienced over the past two or three months, "stocks are still down for the year." 

Michael Sheldon, executive director and chief investment officer of RDM Financial Group, tells Grow that the best thing to do is to remember that most investors have time on their side.

"As an investor, you want to look ahead to the next 12 to 18 months instead of focusing on the next week or two," he said.

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