There's a New Top Buy for Investment Clubs in September 2022
The longtime #1 most popular buy of clubs was knocked off the leaderboard.
For some time now, a single company has dominated the #1 position as the most purchased, most sold, and most owned stock in investment club portfolios.
Apple (AAPL) has a long track record as the most popular stock of clubs, appearing at the top of the lists of stocks bought each month by clubs, stocks sold by clubs, and total holdings. this makes sense since Apple is the largest public company by market cap in the world, with a current market cap of around $2.4 trillion. Apple dominates the broad market indexes and has delivered outstanding performance to shareholders in the last several decades.
In this time, many clubs have seen their Apple shares increase greatly in price, creating wealth but also causing portfolios to be overweighted, which in turn may cause clubs to sell some shares to improve their portfolio diversification. Other clubs may vote to sell their Apple stock to preserve profits or transfer shares to fully-withdrawing members to capture the tax advantages.
At the same time, other clubs see Apple's long-term prospects as a buying opportunity, and thus are initiating or adding to positions in their clubs. This happens regularly enough that Apple has topped the myICLUB Top 40 leaderboard regularly as the most bought, sold, and held stock.
But in September 2022, a new contender reached the top of the most purchased stock list -- Alphabet (GOOG, GOOGL). With a market cap of around $1.34 trillion, Alphabet is still one of the five biggest companies in the world, and has been are a regular near the top of the myICLUB Top 40 in each category. But club moves in the last month pushed it to the top of the most buys list.
What is it about Alphabet that has investment clubs excited? It could be that they spot a bargain/ Alphabet's price drop thus far in 2022 has been greater than that of Apple's. As of September 30, 2022, Alphabet's price had declined 33.7% in the year compared to just 18.2% for Apple. For long-term investors, this may place Alphabet in an attractive valuation when considering the total return potential of the company over the next half-decade. This makes the decision about deploying cash into Alphabet purchases seem like an opportunity for better long-term returns.
Of course, each investor and investment club will make their own assessment about the merits of any stock. But when many clubs make a decision independently, it may be worth paying attention.
Click here to see the rest of the current myICLUB.com Top 40.
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