If You Invested $1000 in S&P Global a Decade Ago, This is How Much It'd Be Worth Now (2024)
Zacks Equity Research
·4 min read
How much a stock's price changes over time is important for most investors, since price performance can both impact your investment portfolio and help you compare investment results across sectors and industries.
Another thing that can drive investing is the fear of missing out, or FOMO. This particularly applies to tech giants and popular consumer-facing stocks.
What if you'd invested in S&P Global (SPGI) ten years ago? It may not have been easy to hold on to SPGI for all that time, but if you did, how much would your investment be worth today?
With that in mind, let's take a look at S&P Global's main business drivers. Incorporated in December 1925, S&P Global Inc. is a leading provider of transparent and independent ratings, benchmarks, analytics and data to the capital and commodity markets worldwide.
The company operates through six reportable segments: S&P Global Market Intelligence (“Market Intelligence”), S&P Global Ratings (“Ratings"), S&P Global Commodity Insights (“Commodity Insights”), S&P Global Mobility (“Mobility”), S&P Dow Jones Indices (“Indices”) and S&P Global Engineering Solutions (“Engineering Solutions”).
Ratings (27% of total revenues in 2022): Ratings operates as an independent provider of credit ratings, research and analytics, providing investors and other market participants with information, ratings and benchmarks. With offices in more than 25 countries globally, Ratings holds an important position in the world's financial infrastructure. Ratings’ revenues are differentiated between transaction and non-transaction revenues.
Market Intelligence (34%): It helps investment professionals, government agencies, corporations and universities to track performance, generate alpha, identify investment ideas, understand competitive and industry dynamics, perform evaluations and assess credit risk. Desktop, Data Management Solutions and Risk Services are the business lines included in the segment.
Commodity Insights (15%): Commodity Insights provides information and benchmark prices for commodity and energy markets. It helps producers, traders, energy and commodity market intermediaries with price data, analytics and industry insights, thereby enhancing transparency and efficiency in the market.
Indices (12%): Indices is a global index provider that maintains a wide variety of valuation and index benchmarks for investment advisors, wealth managers and institutional investors. Indices mainly derives revenues from asset-linked fees based on the S&P and Dow Jones indices and also from subscription and transaction revenues.
Mobility (10%) & Engineering Solutions (3%) which were acquired as a result of the IHS Markit buyout, serves two different sections of customers. Mobility serves vehicle manufacturers, automotive suppliers, mobility service providers, retailers, consumers, and finance and insurance companies while Engineering Solutions serves technical professionals.
Bottom Line
Putting together a successful investment portfolio takes a combination of research, patience, and a little bit of risk. For S&P Global, if you bought shares a decade ago, you're likely feeling really good about your investment today.
According to our calculations, a $1000 investment made in February 2014 would be worth $5,971.20, or a gain of 497.12%, as of February 5, 2024, and this return excludes dividends but includes price increases.
Compare this to the S&P 500's rally of 178.17% and gold's return of 55.50% over the same time frame.
Analysts are forecasting more upside for SPGI too.
S&P Global remains well-poised to gain from the growing demand for business information services. Buyouts help innovate, increase differentiated content and develop new products. New service launches have been aiding the company's growth. Dividend payments and share buybacks boost investors' confidence and positively impact earnings per share. Increasing current ratio bodes well for the company. Partly due to these positives, the stock has gained in the past year. However, S&P Global remains vulnerable to proceedings, investigations and inquiries concerning the ratings provided, leading to legal charges, damages or fines. Growth initiatives, higher compensations and incentives raise the company's expenses. More long-term debt than cash does not bode well for the company.
The stock has jumped 6.10% over the past four weeks. Additionally, no earnings estimate has gone lower in the past two months, compared to 9 higher, for fiscal 2023; the consensus estimate has moved up as well.
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Stock Market Average Yearly Return for the Last 10 Years
The historical average yearly return of the S&P 500 is 12.68% over the last 10 years, as of the end of February 2024. This assumes dividends are reinvested. Adjusted for inflation, the 10-year average stock market return (including dividends) is 9.56%.
If you had invested $1,000 in Google stock on Aug. 19, 2004, today, you would have $60,107. Likewise, if you had invested $1,000 in an index fund replicating Nasdaq, you would have $9,000. A similar $1,000 investment in an index fund that replicates the S&P 500 would be worth $4,815.
In 1980, had you invested a mere $1,000 in what went on to become the top-performing stock of S&P 500, then you would be sitting on a cool $1.2 million today.
Investing in an S&P 500 fund can instantly diversify your portfolio and is generally considered less risky. S&P 500 index funds or ETFs will track the performance of the S&P 500, which means when the S&P 500 does well, your investment will, too. (The opposite is also true, of course.)
Looking at the S&P 500 for the years 1993 to mid-2023, the average stock market return for the last 30 years is 9.90% (7.22% when adjusted for inflation).
So, if you had invested in Netflix ten years ago, you're likely feeling pretty good about your investment today. A $1000 investment made in March 2014 would be worth $9,728.72, or a gain of 872.87%, as of March 4, 2024, according to our calculations. This return excludes dividends but includes price appreciation.
For example, if an investment scheme promises an 8% annual compounded rate of return, it will take approximately nine years (72 / 8 = 9) to double the invested money.
If you invest $100,000 at an annual interest rate of 6%, at the end of 20 years, your initial investment will amount to a total of $320,714, putting your interest earned over the two decades at $220,714.
The S&P 500 carries market risk, as its value fluctuates with overall market performance, as well as the performance of heavily weighted stocks and sectors. For example, the technology sector performed poorly in 2022 and was a large contributor to the index's correction that year.
Similarly, the index is made up of only stocks. When the stock market is experiencing a general downturn, there are no other asset classes (like bonds and REITs) to counterbalance that loss. This is why investing only in the S&P 500 does not help the investor minimize risk.
Investing products such as stocks can have much higher returns than savings accounts and CDs. Over time, the Standard & Poor's 500 stock index (S&P 500), has returned about 10 percent annually, though the return can fluctuate greatly in any given year. Investing products are generally very liquid.
Diversification is an important factor, and you'll want to balance having too much in one type of asset. For example, many experts recommend having an allocation to large stocks such as those in an S&P 500 index fund as well as an allocation to medium- and small-cap stocks.
The S&P 500 has returned 1,800% over the last three decades, compounding at 10.3% annually. That period encompasses enough different market conditions that similar returns are likely over the next three decades. That does not mean the S&P 500 always goes up.
What Is the Average Rate of Return for the S&P 500 for the Last 20 Years? The average annualized return of the S&P 500 between 2003 and 2023 is 10.20%. ...
What Is the Average Rate of Return for the S&P 500 for the Last 10 Years? ...
Overall, the S&P 500 grew at a compound annual growth rate of 13.8% over the last 15 years. Adjusting for inflation, the index grew 11.2% per year during that period.
Basic Info. S&P 500 5 Year Return is at 85.38%, compared to 83.02% last month and 55.60% last year. This is higher than the long term average of 45.20%. The S&P 500 5 Year Return is the investment return received for a 5 year period, excluding dividends, when holding the S&P 500 index.
In the last 30 Years, the SPDR S&P 500 (SPY) ETF obtained a 10.54% compound annual return, with a 15.10% standard deviation. Discover new asset allocations in USD and EUR, in addition to the lazy portfolios on the website.
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