If you're investing any amount of money in any stock today, you should be thinking about what it might look like in 20 years. Too far out to envision? While, it definitely sounds like a long time, a long-term investing strategy means you believe the business you have invested in has what it takes to grow over many years and even decades. If you're not confident about a stock's potential down the line, you might want to rethink the investment altogether.
Let's take a step back and consider how one stock has moved over the past 20 years. Apple(NASDAQ: AAPL) is the most valuable company in the world, and if you would have invested $1,000 in Apple stock 20 years ago, you'd have a lot more money today.
Warren Buffett's favorite stock?
Warren Buffett recently said that Apple has a better business than his longtime favorites, Coca-Cola and American Express. He's also sold a boatload of Apple stock recently, but it remains his largest position at 23% of the entire Berkshire Hathaway equity portfolio.
Buffett first bought Apple stock in 2016. Including dividends, a $1,000 investment then would be worth $8,860 today.
If you'd identified Apple stock as an excellent investment before Buffett and held through thick and thin, you'd have much more than that. Because the more time you hold on, the more the investment compounds, it's an exponential difference. If you had invested $1,000 in Apple stock 20 years ago, today you'd have more than $227,000, at an annualized return of 31.2%. Including dividends reinvested, you'd be sitting on nearly $270,000.
In particular, if you're starting young, you should be thinking several decades out when you create a portfolio and consider how you want your retirement nest egg to look in 40 or 50 years. Even 20 years can let your investment compound long enough to create incredible wealth if you choose great stocks and let them work for you.
Don’t miss this second chance at a potentially lucrative opportunity
Ever feel like you missed the boat in buying the most successful stocks? Then you’ll want to hear this.
On rare occasions, our expert team of analysts issues a “Double Down” stock recommendation for companies that they think are about to pop. If you’re worried you’ve already missed your chance to invest, now is the best time to buy before it’s too late. And the numbers speak for themselves:
- Amazon: if you invested $1,000 when we doubled down in 2010, you’d have $22,469!*
- Apple: if you invested $1,000 when we doubled down in 2008, you’d have $42,271!*
- Netflix: if you invested $1,000 when we doubled down in 2004, you’d have $411,970!*
Right now, we’re issuing “Double Down” alerts for three incredible companies, and there may not be another chance like this anytime soon.
*Stock Advisor returns as of November 4, 2024
American Express is an advertising partner of Motley Fool Money. Jennifer Saibil has positions in American Express and Apple. The Motley Fool has positions in and recommends Apple and Berkshire Hathaway. The Motley Fool has a disclosure policy.
