How $1,000 Invested in the S&P 500 Grows Over 10 Years
Investing in the S&P 500 has proven to be a winning strategy over time. Even Warren Buffett, one of the world’s most successful investors, has long been a proponent of index funds as a way for individual investors to build wealth over the long term. He’s famously recommended that most people invest in low-cost index funds that track the broader market, rather than trying to pick individual stocks or actively manage their investments.
In his annual shareholder letters for Berkshire Hathaway, Buffett has often touted the virtues of index funds and criticized the high fees and underperformance of many actively managed funds. He has even gone so far as to bet $1 million that an S&P 500 index fund would outperform a selection of hedge funds over a 10-year period, a bet that he ultimately won.
If you had invested $1,000 in the S&P 500 10 years ago, how much would it be worth today?
The answer depends on a number of factors, including market performance, taxes, and fees. However, we can get a rough estimate by looking at historical returns.
According to historical data, the S&P 500 had an average annual return of around 10% over the past decade.
This means that if you had invested $1,000 in the index 10 years ago and left it untouched, it would be worth around $2,600 today. So if you want to have an extremely lazy, one fund portfolio, this could be it!
Of course, this calculation doesn’t take into account taxes and fees, which can eat into your returns. But it also doesn’t take into account if you continue to invest every month over those 10 years.
Conclusion
In conclusion, stocks fluctuate day-to-day, but if you had invested $1,000 in the S&P 500 10 years ago and left it untouched, it would be worth around $2,600 today. However, taxes, fees, and market volatility can all impact your returns, so it’s important to do your research and consult with a financial professional before making any investment decisions. That said, the S&P 500 is comprised of behemoths like Apple, Microsoft, Amazon, Facebook, Alphabet (Google) and others. And that is why it has been a strong investment strategy for the long run.