The average return of the S 500 over the long term is about 10% per year. So, many times, when a stock returns 40% or more within a year, investors will immediately throw up their red flags. Some will sell, and others refuse to buy, but looking solely at the stock's return is a terrible way to judge whether it's a buy.

If you do that, you'll miss out on many of the market's biggest winners: Nvidia and Super Micro Computer have had an amazing run since the start of 2023; yet, if you sold when you were up 40%, you missed out on massive, portfolio-changing returns.

Meta Platforms (NASDAQ: META) is in this boat as well. The stock is up 40% in 2024 and over 300% since the start of 2023. But despite that success, I think it still has room for more.

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Source Fool.com