Here is the Beginner’s Guide to Investing. Investing in the stock market has been shown to be the most efficient and effective way of turning money into more money, and yet 61% of millennials say they’re afraid of getting started. Overcoming that fear, though, could pay off. Just look back 10 years.
© Author of the article: Shawn M. Carter.
© Source: CNBC
Financial website How Much took a look at some popular stocks in 2007 to find out how much a $1,000 investment in each would be worth now, as of October 31.
In the below graphic, the blue dots are equivalent to the $1,000 initial investment, so they are the same size for each company. The pink ones represent the current total value of the investment, so each of those varies.
A decade of Investment returns for 15 of America’s favorite Companies:
Here are the top picks in descending order:
A $1,000 investment 10 years ago worth be worth $51,966 today.
That being said, our graph provides a quick snapshot of the U.S. economy over the past several years. First and foremost, you can easily see which companies have been winners and losers, and as a result you can infer significant changes in the economy. Netflix is the obvious standout. $1,000 invested ten years ago would be worth a whopping $51,966 today, which is by far and away the best performance in our graph. Netflix made a big bet that it could profitably create its own content. It wasn’t clear this would pay off back in 2007, and it remains to be seen how Netflix will compete with the proliferation of other streaming services.
$1,000 investment 10 years ago would be worth $12,398 today.
$1,000 investment 10 years ago would be worth $6,228 today.
$1,000 investment 10 years ago would be worth $4,687 today.
$1,000 investment 10 years ago would be worth $3,319 today.
$1,000 investment 10 years ago would be worth $2,922 today.
$1,000 investment 10 years ago would be worth $2,824 today.
$1,000 investment 10 years ago would be worth $2,793 today.
“The larger the pink circle, the more your investment is worth,” according to How Much. “If the pink fits inside the blue, then you lost money. The (graphic) assumes that you took any dividend paid out in cash and did not reinvest into the company by buying more stock.”
These companies largely proved to be good investments. “All things being equal, prices seem pretty high right now. In fact, most of the companies on our chart have seen significant gains in recent years,” the report states.
But there are cautionary tales to be seen in the chart, too, since any individual stock can either over- or under-perform. That’s why so many experts suggest that, to get started in the stock market, you consider index funds, which hold every stock in an index such as the S&P 500, including big-name companies such as Apple, Microsoft and Google, and offer low turnover rates, so the attendant fees and tax bills tend to be low as well.
Looking at stock prices is a good barometer for judging the overall economy. All things being equal, prices seem pretty high right now. In fact, most of the companies on our chart have seen significant gains in recent years. Think about it. Investing in the lowest performers like Microsoft, FedEx, and Walmart would still have doubled your money. Investors focused on long-term capital appreciation would take those results every time.
Warren Buffett, Mark Cuban and Tony Robbins all agree index funds are a safe bet, especially for new investors, since they fluctuate with the market, stay pretty constant and eliminate the risk of picking individual stocks.
Investing for the first time can be a big step, and it can be risky. Past returns do not predict future results. But if you find the right stocks, it can lead to a real pay off.