The S & P 500 may have advanced in 2023, but it has been a nightmare for stock pickers, said Ned Davis Research. At least on the surface, it would appear that this year has been a better one for equity investors than 2022. The S & P 500 is higher by 15% this year, buoyed by gains in megacap tech stocks and, more recently, by falling Treasury yields. Last year, it ended down by more than 19%. .SPX mountain 2022-01-01 S & P 500 But a peek under the hood shows the stock rally has been narrow, with few other major asset classes having joined the broader index in its advance, according to Ed Clissold, chief U.S. strategist at Ned Davis Research. In fact, the median return of -1.1% in the S & P 500 has only been lower seven times since 1972. Those times include the oil shock of 1973-74, the stock market crash of 1987 and the great recession in 2008. “Stock pickers’ nightmare,” Clissold wrote in a Monday note. “The jump in cap-weighted U.S. equity benchmarks has been driven by a small number of stocks, adding several degrees of difficulty to equity managers’ jobs.” Over the past three months, only 32.5% of stocks beat the S & P 500, the note said. That’s higher than the record low of 19.1% in June but remains far below the long-term average of 49.5%. Meanwhile, the broader index is higher this year by just 1.7% after excluding the top eight megacap tech stocks. Those eight names have rallied 67.4% this year. Still, some notable gainers this year include T-bills, which are up more than 4% this year. Gold and bitcoin, considered safe havens by investors, are up 6.4% and 124.9%, respectively. “But in terms of sizeable options for most asset allocators, 2023 has been historically tough,” Clissold wrote.