By Adam Shell
NEW YORK - The best gift this holiday season won't necessarily come in a big box topped with a red bow. In fact, it will arrive late, via mail, sometime in January in a plain envelope containing stock investors' account statements.
And when investors rip open the gift from Wall Street, they will see big gains on their stock holdings.
How big? Right now the benchmark Standard & Poor's 500-stock index, which rose 0.3% on Chirstmas Eve to a record 1833.32, is up 28.55% for the year, putting it on track for its best year since 1997. (Yup, its best performance in 16 years.) That means an investor that started the year with $100,000 in their 401(k), now has a balance of around $128,550. Not too shabby for one-year's of work for your hard-earned cash.
"It was a great year, says Alan Skrainka, chief investment officer at Cornerstone Wealth Management. "One for the record books."
Stocks, of course, were driven by the Federal Reserve's easy-money policies, an improving economy and a resurgence in investor confidence.
And it's not just the large-company S&P 500, which has notched 43 record closes this year, that is delivering a gift of big profits to stock investors.
• The blue-chip Dow Jones industrial average is up 24.8% so far in 2013. If that gain holds up, it would mark the iconic Dow's best year since 2003.
• The technology-packed Nasdaq composite has also put up big numbers this year. The Nasdaq is up 37.6%. And while that's only the best return since a 43.9% gain in 2009, it is still good enough to rank as the sixth best full-year performance for the index since its 1972 inception.
• Small-company stocks have also posted big returns this year. The Russell 2000 stock index is up 36.8%, on pace for its biggest return in 10 years and its fourth-best annual return in history.