Current market conditions have led many investors to exit their positions in favor of holding cash until the next clear signs of an economic rebound. But it’s not all dreary news in the world of investing: even if your portfolio has been mostly in the red over the past year, you may be holding one or more stocks that have outperformed the S&P 500 by leaps and bounds.
Key Takeaways:
- The stock market’s current volatility has generated uncertainty among investors.
- Analysts are split over the question of whether or not a recession is imminent.
- The top stocks of 2022 have, to date, vastly outperformed the S&P 500.
- Offsetting capital gains tax is possible by donating stocks to a charitable organization.
Whether you’re looking to buy now or cash out, this roundup of the best-performing large- and mid-cap stocks should provide some food for thought. Plus, if you’re looking for the best way to offset some of your capital gains and lower your tax burden, you’ll find some actionable ideas at the end of this article.
What’s covered below:
- Is the Economy Headed Toward a Recession?
- The 10 Best-Performing Stocks (Of Past 12 Months, 3 Years & 5 Years)
- What Are the Capital Gains on Appreciated Stock in 2022?
- The Tax Benefits of Donating Stocks to Charities
Please note that the information in this article is for informational purposes only and is not financial advice. Speak to a qualified tax professional about your individual financial situation.
Is the Economy Headed Toward a Recession?
Recessions are difficult to predict, but that hasn’t stopped analysts from forecasting the fate of the U.S. and global economies. A recession, as defined by the National Bureau of Economic Research (NBER), is a significant decline in economic activity spread across the economy that lasts more than a few months.
Figures and factors that influence these outlooks include recent GDP growth, jobs added or lost, inflation, personal consumption expenditures (PCEs), and the Federal Reserve’s rate hikes.
While 65% of forecasters surveyed by the Wall Street Journal this fall think a recession is coming in 2023, Goldman Sachs analysts believe there’s only a 35% chance of a recession next year.
Because economic predictions seem to be a mixed bag, to say the least, investors are highly uncertain about the direction of the market.
What are the 10 Best-Performing Stocks?
The 10 Best Stocks of the Past 12 Months
The best-performing mid- and large-cap stocks of the past year are from the materials, energy, health care and utilities sectors. As of October 31, 2022, the top ten stocks on this list are:
- Sigma Lithium (SGML) (+318%)
- Torm (TRMD) (+246%)
- Lantheus Holdings (LNTH) (+209%)
- PBF Energy (PBF) (+191%)
- Scorpio Tankers (STNG) (+190%)
- Alpha Metallurgical Resources (AMR) (+174%)
- International Seaways (INSW) (+135%)
- Constellation Energy (CEG) (+125%)
- CONSOL Energy (CEIX) (+125%)
- Alliance Resource Partners (ARLP) (+122%)
The 10 Best Stocks of the Past 3 Years
Over the past three years, the best-performing stocks have been from the materials, health care, energy, and consumer discretionary sectors. The top performing stocks, as of October 31, 2022, were:
- Sigma Lithium (SGML) (+2567%)
- Karuna Therapeutics (KRTX) (+1348%)
- Antero Resources (AR) (+1273%)
- Alpha Metallurgical Resources (AMR) (+631%)
- Turquoise Hill Resources (TRQ) (+547%)
- Dillard’s (DDS) (+415%)
- CONSOL Energy (CEIX) (+338%)
- Matador Resources (MTDR) (+361%)
- Devon Energy (DVN) (+338%)
- EQT (EQT) (+305%)
The 10 Best Stocks of the Past 5 Years
The top ten stocks over the last five years are in the energy, financials, consumer discretionary, and health care sectors. As of October 31, 2022, the top-performing stocks in this five-year time period were:
- FLEX LNG (FLNG) (+2423%)
- Kinsale Capital Group (KNSL) (+642%)
- Dillard’s (DDS) (+662%)
- Texas Pacific Land (TPL) (+512%)
- LPL Financial Holdings (LPLA) (+448%)
- Apellis Pharmaceuticals (APLS) (+331%)
- Murphy USA (MUSA) (+323%)
- Torm (TRMD) (+312%)
- Lantheus Holdings (LNTH) (+296%)
- Comstock Resources (CRK) (+276%)
What are the Capital Gains on Appreciated Stock in 2022?
If you hold a stock for at least one year, it qualifies as a long-term investment. That means that if you choose to sell your shares after a year, you will incur long-term capital gains which you will likely owe taxes on. In the U.S., the federal tax rates for long-term capital gains in 2022 can be as high as 20%.
On the other hand, if you held these shares for less than a year, you will incur short-term capital gains. In the U.S., short-term capital gains taxes are treated like your ordinary taxable income, for which the rates in 2022 are: 10%, 12%, 22%, 24%, 32%, 35% or 37%.
The Tax Benefits of Donating Stocks to Charities
In general, owners of appreciated stocks can avoid paying capital gains tax if they donate the shares to registered charities such as qualified 501(c)3 organizations. If the stock was held for more than one year, the fair market value can also be itemized as a charitable contribution which can qualify for a tax deduction.
Where can I donate stocks and other non-cash assets?
Investors that wish to donate stock shares to registered charities can browse nonprofits listed on The Giving Block’s philanthropy platform.
Discover the benefits of donating stocks to charitable causes.
