S&P 500 up 31% Since Oct., Will the Rally Continue?


Since the market reached a one-year low on October 4, the S&P 500 index is up 31 percent, trading near its highest level since May 2008. Do stocks have further room to run?

"During most presidential [election] years, the market drifts during spring and summer months because of the uncertainty surrounding the election, and this year should be no different," says Mark Lamkin, CEO and Chief Investment Strategist for Lamkin Wealth Management.

"I believe we see a sideways to gently down market that is supported by earnings but concerned with earnings growth," he adds. "After the election, I think we rally and finish the year in a range between 8 percent and 12 percent."

From 1940 until now, average election year returns are about 7.6 percent, with the average jumping to 9.5 percent when 1900 historical figures are included.

In the past sixteen weeks, the S&P 500 closed down only three times, posting its longest winning streak since the period ending Sept. 1, 1989.

Financials, which were the worst performing stocks in 2011 with a loss of 58 percent, have surpassed technology to take the first place since October, up nearly 35 percent.

On the flip side, defensive names such as utilities and telecom companies have lagged, as investors ventured into riskier names.

Below is a look at the 10 best performing stocks since October 4. PulteGroup and Lennar are up more than 100 percent.

Lamkin advises investors to look at companies that are not susceptible to high gas and other commodities prices. His favorite sector is technology, while he's still underweight financials.

"Dividend-yielding stocks that are in the area of what people need, and not what they want, are also very good plays here, as the market most likely trades sideways for the next six months."

Comments? Ideas? Send them to giovanny.moreano@nbcuni.com