Every year, investment publications have some fun and show investors just how strong their returns could have been had they had the foresight to invest in some of the best-performing assets. Investing with the benefit of perfect hindsight isn't possible since investing must first be done before returns are known, but looking in the rearview mirror can help provide insight into prospective asset performance. Below are five strong investments so far this year.

Apple, Inc.
Investors who have not invested in tech giant Apple, Inc. (Nasdaq:AAPL) so far in 2012 have missed out on huge investment gains. The stock is up around 55% so far this year and was up approximately 70% prior to a recent pullback. This continues a multi-year run. Over the past five years, the stock is up more than 275% and has pummeled the overall stock market return, which has been slightly negative. The million dollar question is, of course, whether Apple's rally will continue. For now, the popularity of its iPhone, iPad and extensive app catalog is a competitive advantage that rivals have been unable to eat into with much success.

Homebuilders
Investors, as well as some of the largest banks in the country, are calling a bottom to the housing market. The market had been in free fall since around 2006, which counts as the peak of the housing bubble. Third quarter earnings from large banks, including JPMorgan (NYSE:JPM), Bank of America (NYSE:BAC) and Wells Fargo (NYSE:WFC) have seen large rises in home refinancing fees, which stems from record-low interest rates and housing values that are now seeing slight upticks in prices. The best performing homebuilding stock so far in 2012 is PulteGroup (NYSE:PHM); its stock is up approximately 150%. The iShares Dow Jones U.S. Home Construction ETF (ARCA:ITB) is also up an impressive 64%, to indicate the market is improving markedly overall.

Inverse Volatility
These days, institutional shops are touting volatility, as measured by the VIX index as its own asset class. The Volatility Index, or VIX, is the ticker symbol for the Chicago Board Option's Exchange index that tracks the market's expectation for volatility over the coming 30 days. The ability to predict what volatility is going to be on any given day or over the long haul remains suspect, but investors lucky enough to bet on decreased volatility so far in 2012 have more than doubled their money. The VelocityShares Daily Inverse VIX ST ETN (ARCA:XIV) has returned approximately 165% this year to date.

Biotech
Though not mentioned often, the biotechnology industry has put in a strong showing so far this year. The ProShares Ultra Nasdaq Biotechnology (Nasdaq:BIB), which adds some leverage to boost returns on the biotech index, is up more than 80% so far this year. Some of the larger biotech names, including Amgen (Nasdaq:AMGN) and Biogen Idec Inc. (Nasdaq:BIIB), are both up around 35% in 2012 to handily beat the market return of closer to 15%.

Egypt
Looking at a specific foreign market that has performed well so far this year, the Market Vectors Egypt Index ETF (ARCA:EGPT) is up approximately 60% in 2012. Political instability remains, but there are other areas in the region that remain far less stable. Egypt's strong run demonstrates the positive returns that can come with timing the end of geopolitical conflict in a country. Greece remains a work in progress, but favorable developments could mean potentially outsized returns for brave investors betting on a recovery.

The Bottom Line
Of the above assets, Apple and the homebuilding markets could continue to do well for the remainder of the year. Calling short-term market movements is as much luck as skill, but can work out quite well for investors who end up on the right side of the call.

At the time of writing, Ryan Fuhrmann owned shares of BAC since 2011, JPM since 2011 and WFC since 2007.

Related Articles
  1. Home & Auto

    Millennials Guide: How To Read a Lease

    Everything you need to know before you rent a home.
  2. Mutual Funds & ETFs

    ETF Analysis: PowerShares FTSE RAFI Emerging Mkts

    Learn more about the PowerShares FTSE RAFI Emerging Markets ETF, a fundamentally weighted fund that tracks emerging market equities.
  3. Mutual Funds & ETFs

    ETF Analysis: iShares Cali AMT-Free Muni Bond

    Learn more about the iShares California AMT-Free Municipal Bond exchange-traded fund, a popular tax-advantaged ETF that dominates its category.
  4. Fundamental Analysis

    10 Major Companies Tied to the Apple Supply Chain

    Apple has one of the best supply-chain models. Here are some of the top businesses involved, and the benefits and challenges for all.
  5. Mutual Funds & ETFs

    ETF Analysis: SPDR S&P Emerging Markets Dividend

    Learn more about the SDPR S&P Emerging Markets Dividend Fund, a yield-focused exchange-traded fund tracking global emerging economies.
  6. Mutual Funds & ETFs

    ETF Analysis: First Trust Dow Jones Global Sel Div

    Find out about the First Trust Dow Jones Global Select Dividend Index Fund, and learn detailed information about characteristics and suitability of the fund.
  7. Term

    Why You Should Consider Investing In the Tech Industry

    The technology industry offers huge investment opportunities.
  8. Mutual Funds & ETFs

    ETF Analysis: U.S 12 Month Natural Gas

    Learn about the United States 12 Month Natural Gas Fund, an exchange-traded fund that invests in 12-month futures contracts for natural gas.
  9. Mutual Funds & ETFs

    ETF Analysis: iShares Floating Rate Bond

    Explore detailed analysis and information of the iShares Floating Rate Bond ETF, and learn how to use this ETF as a defense against rising interest rates.
  10. Mutual Funds & ETFs

    ETF Analysis: ProShares UltraPro Short S&P500

    Find out information about the ProShares UltraPro Short S&P 500 exchange-traded fund, and learn detailed analysis of its characteristics and suitability.
RELATED TERMS
  1. Equity

    The value of an asset less the value of all liabilities on that ...
  2. Exchange-Traded Fund (ETF)

    A security that tracks an index, a commodity or a basket of assets ...
  3. Exchange-Traded Mutual Funds (ETMF)

    Investopedia explains the definition of exchange-traded mutual ...
  4. Hard-To-Sell Asset

    An asset that is extremely difficult to dispose of either due ...
  5. Sucker Yield

    When an investor has essentially risked all of his capital for ...
  6. Commercial Real Estate Loan

    definition of a commercial real estate loan
RELATED FAQS
  1. How do dividends affect retained earnings?

    When a company issues a cash dividend to its shareholders, the retained earnings listed on the balance sheet are reduced ... Read Full Answer >>
  2. What is the difference between called-up share capital and paid-up share capital?

    The difference between called-up share capital and paid-up share capital is investors have already paid in full for paid-up ... Read Full Answer >>
  3. Why would a corporation issue convertible bonds?

    A convertible bond represents a hybrid security that has bond and equity features; this type of bond allows the conversion ... Read Full Answer >>
  4. What does a high turnover ratio signify for an investment fund?

    If an investment fund has a high turnover ratio, it indicates it replaces most or all of its holdings over a one-year period. ... Read Full Answer >>
  5. Does index trading increase market vulnerability?

    The rise of index trading may increase the overall vulnerability of the stock market due to increased correlations between ... Read Full Answer >>
  6. How does additional paid in capital affect retained earnings?

    Both additional paid-in capital and retained earnings are entries under the shareholders' equity section of a company's balance ... Read Full Answer >>

You May Also Like

COMPANIES IN THIS ARTICLE
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!