Investing in the stock market can be a lucrative endeavor, but it often comes with its fair share of risks. However, you don't need to invest in risky stocks to make a lot of money. One investment strategy that has consistently proven successful is putting money into the S&P 500. Billionaire Warren Buffett continually recommends investing in this index, and for good reason. Here's why and how much you'd have if you invested $10,000 in the S&P 500.
The S&P 500, a benchmark index that tracks the performance of 500 large-cap U.S. stocks, has a long history of delivering solid returns. Since 1971, it has delivered an annualized return of 7.58%, or 10.51% with dividends reinvested. This means that if you had invested $10,000 in the S&P 500 in 1971 and left it untouched, it would have grown to a substantial amount over time.
To estimate how much your $10,000 investment in the S&P 500 may grow, you can use an investment and stock calculator like the one provided by NerdWallet. This calculator takes into account your individual inputs, such as the initial investment amount, the time period, and the expected annual return, to provide an estimate of the potential growth.
It's important to note that the S&P 500, like any other investment, is not without its risks. The market can experience downturns, as seen during the financial crisis in 2008. However, even during challenging times, the S&P 500 has shown resilience. If you had invested $10,000 at the market low during the financial crisis, you would have made a significant amount of money by now.
While the S&P 500 is a reliable investment option, it's not the only one available. Amazon.com Inc. (AMZN) is a well-known company that has seen its shares perform well over the years. After struggling in 2022, Amazon's shares are once again on the rise in 2023. If you're interested in estimating the potential growth of your investments, you can use MarketBeat's free investment calculator. This tool allows you to see the growth that you can achieve over time based on your individual investment inputs.
On the other hand, not all investments yield positive results. Take GameStop (GME), for example. Despite the recent headlines and market rally, it's important to recognize that investing in GameStop a year ago would have resulted in a significant loss. If you had invested $10,000 in GameStop and held onto the stock, you would have experienced a loss of $2,032.
In conclusion, the S&P 500 has proven to be a reliable investment option over the years. By utilizing an investment calculator, you can estimate the growth potential of your $10,000 investment in the S&P 500 or other stocks. However, it's crucial to remember that all investments come with risks, and thorough research is necessary before making any investment decisions.
