Perhaps the most famous and successful investor in recorded history – Warren Buffett – has long maintained that the smartest move regular people who want to participate in the stock market can make is to invest in a fund tracking the S&P 500 index.
Given that the S&P 500 tracks, as the name suggests, the 500 biggest companies in the U.S. any fund that attempts to match it ensures decent diversification and exposure to numerous blue chip stocks while still providing room for significant growth – as evidenced by the staggering rise of multiple magnificent 7 stocks including Nivida (NASDAQ: NVDA), Apple (NASDAQ: AAPL), and Microsoft (NASDAQ: MSFT).
The performance of the index in the last decades also lends credence to Buffett’s advice as the S&P 500 rose 30.52% in the last 52 weeks of trading, 86.55% in the last 52 weeks, and an impressive 3,230.75% since 1984.
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With the advice and past performance in mind, Finbold decided to find out just how much an everyday investor would have made by investing in the index near the end of the latest major financial crisis a decade and a half ago.
How much would a $1,000 investment in the S&P 500 in 2010 be worth now?
Almost a decade and a half ago, on December 31, 2010, the S&P 500 was well on its way to recovery from the 2008 crash and stood at 1,257.64 points.
Given that the index stood at 5,224.62 at the stock market’s close on Wednesday, March 20, 2024 – its all-time high – a $1,000 investment made in 2010 would have returned 315.43% and stood, at press time, at $4,154.30.
Even a much later investment of the same size – perhaps made in April 2020 as the market started recovering from the COVID-19 crash – would have returned 109.94% and would have grown to $2,099.38.
What is next for S&P 500 in 2024?
The forecasts for the S&P 500 in 2024 are, much like the index’s history, also strong with most major institutions predicting it will continue rising – particularly in the second half of the year when the interest rate cuts are expected to start happening.
The big tech firms within the index are expected to account for much of the growth and, among them, companies involved with the artificial intelligence (AI) boom are expected to take the lead.
On the other hand, despite the bullishness, there remain some concerns when it comes to the S&P 500 – and the overall economy – in 2024 as the index has already displayed some worrying similarities with the stock market in the leadup to the 1929 crash and consolidation of gains into the magnificent 7 companies is similarly concerning.
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Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.
