If You'd Invested $5,000 in VOO 15 Years Ago, Here's What You'd Have Today
The number is exaggerated by an unusually strong period for stocks, but given enough time, even more normalized gains would lead to surprisingly sizable returns.
Assuming a $5,000 investment in the Vanguard S&P 500 ETF (VOO) or the SPDR S&P 500 ETF Trust (SPY) back in 2011, that holding would be worth around $30,500 today, without reinvesting dividends. However, if you had been reinvesting those dividends, your investment would be worth approximately $39,980.
This hypothetical scenario reflects an average yearly gain of nearly 15%, which significantly outperforms the long-term average of about 10% per year. It is crucial to note that the past three years have experienced unusually strong performance, particularly due to the post-COVID-19 stimulus-driven bull market. As a result, the ETF's annual returns are likely to revert closer to the longer-term average over time.
With a more typical annual gain of 10%, a $5,000 investment would have grown to nearly $21,000 in 15 years. Despite the fluctuations, the stock market remains the most effective avenue for achieving wealth-building growth that significantly outpaces inflation. For further guidance on investment strategies, consider The Motley Fool's premium services.
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