Yahoo Finance ‘The holy grail’: This stock surged 2,800% in 10 years
If you’d invested in Netflix a decade ago, you’d be absolutely laughing.
One share in Netflix in June 2010 would have set you back US$15.30 (AU$22.26). If you invested US$1,000 into Netflix then, you would have received 65.36 shares.
Five years later, price per stock hit US$94.04, meaning your shares would be worth US$6,146.
But on 30 June this year, you’d really be having a field day: price per stock is at US$443.40, meaning your US$1,000 from 2010 would be worth a whopping US$28,980.
“A share that goes up nearly 2,800 per cent in 10 years is the holy grail of investing,” Kylie Purcell, investments editor at Finder.com.au told Yahoo Finance.
If you invested US$1,000 in Apple in 2010, you’d still be cheering: the value of your shares in 2020 would be almost US$10,000.
On home soil, investing $1,000 in CSL, a biotechnology company that develops vaccines, a decade ago would have seen your shares worth $2,654 in 2015, and a whopping $8,881 in June this year.
“A company like CSL has gone from strength to strength in the past 10 years. Despite a volatile first 6 months of 2020, it is up 788 per cent since 2010,” Purcell said.
You wouldn’t have been as lucky if you invested in some bank stocks, the data revealed.
Investing $1,000 in Westpac in 2010 would have been worth $1,514 in 2015, but just $840 in June this year.
However, you’d still be making money on CommBank if you invested $1,000 back in 2010. Your money would have purchased you 20.67 shares, which would be worth $1,406 now - though that’s still lower than 2015, when your shares would have been worth $1,750.
“The share market is full of winners and losers. It’s hard to pin down what is going to make one explode and another hold or drop,” Purcell said.
And while some stocks don’t increase much in share price value over time, they can still pay a high dividend, Purcell said.
“For example, Westpac’s share price has dropped over 10 years, but you still would have made a nice chunk of change over that time from its dividend payments,” she said.
“The value rise or decrease of a stock is not the total profit you make from investing in stocks.”
I’m interested in investing. What should I do?
If you’re keen on jumping into the share market, it’s important to do your research before diving head first.
“Stay up-to-date with the broader economy, and learn how major events such as national elections and pandemics impact the share price of various companies,” Purcell said.
And if you’re interested in buying shares in one particular company, learn as much as you can about that company before making your final decisions. That means trawling through annual reports and meeting minutes to learn what’s in the pipeline, Purcell said.
“It sounds nerdy, but this could mean the difference between a good decision and one you regret.”
And while we’ve looked at particular stocks for the purposes of this article, you shouldn’t get stuck in a “one-stock mentality”, Purcell said.
“Diversifying your investments will help lower your risk, and ensure you don't have all your eggs in the one basket.”
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