Investing in the stock market has been touted as a strong method for turning your cash into more money down the road, but many are hesitant to take the leap due to the inherent risk involved. However, deciding to invest in a company can pay off, even over a period of just 10 years.
As reported by CNBC, How Much, a financial website, examined specific popular stocks to determine what an investment made in 2007 would be worth today, based on figures from October 31.
How Much produced a graphic to make comparing the results of the initial $1,000 investment comparable, with the blot dots representing the starting $1,000 and the pink dots showing the total value of the investment now.
The front-runners in the analysis are Netflix and Amazon, where the initial $1,000 investment was worth $51,966 and $12,398 respectively. Apple came in third with a 2017 value of $6,228, and Starbucks was fourth at $4,687. Rounding out the top five was Nike, where the investment would currently be valued at $3,319.
As part of the analysis, How Much assumed that stocks were purchased and held, but that dividends were “paid out in cash” and the person “did not reinvest into the company by buying more stock.”
Now, an investment in a company through the stock market isn’t guaranteed to pay off, as demonstrated by GE, where the initial $1,000 investment was listed as worth $490 today.
The GE example shows why many investment experts recommend index funds as they hold some of every stock available on the index, including companies like Netflix and Amazon, and tend to have lower associated fees.
It is important to note that the companies used in the analysis had different stock prices in 2007, which impact the amount of stock a person could have purchased with the initial $1,000 investment.
Additionally, the analysis focused on some of “America’s favorite companies,” according to How Much, so other stocks may have performed better than some of those listed, but many have been less recognizable to the general public.