It's been a bad month for stocks — capping off what has been a potentially devastating year for investors picking the wrong stocks.
Investors with the impossibly bad luck of buying the worst stock in the Standard & Poor's 500 each month this year — including the disappointing month of August — would have suffered a brutal cumulative loss of 91%. That string of losses would have turned an initial investment of $10,000 into just $857 in eight months.
Compare that with investors who simply bought the S&P 500, for whom the year-to-date loss would be just 4.2%. Not great, but hardly a crisis.
To be clear, the odds of an investor buying the absolute worst stock each and every month this year would be extremely small. Still, these aren't exactly tiny and speculative stocks — all are stocks listed on the S&P 500. This analysis underscores that even investors who aren't necessarily timing the market — but picking individual stocks — are in some ways speculators, too.