A couple of weeks back one of my facebook friends wrote an interesting post. Here is the screen shot below:
He says that,"Apple shares (trade) now around $600 a share. In 2002, they were around $8." Then he says,"Imagine if you bought at least 1000 shares back then?"
First off he is referring to the company that makes the iPod, iPhone, and the MacBook computers. Yes, that Apple. The Apple Computer Company. The stock ticker symbol for AAPL. You can actually see for yourself what the stock price of Apple computer was by going to these 2 websites:
As you can see from the above screenshot the shares of Apple Computer were trading between $7 and $8. So lets take a look at some of the calculations here. If you bought 10 shares of Apple stock in 2002 at $8 per share and just held those shares for 10 years, then you would be looking at a profit of about $5920. This profit will only be realized if you were to sell.
How did I calculate that profit of $5920?
The price you paid for the stock is $80 in 2002 ($8 times 10 shares). And the market value of that stock today is $6000 ($600 times 10 shares). The difference between the price you paid and what the stock is worth now is $5920.
Do you realize that the return on your investment is about 7400%? Can you reap these types of returns in a simple savings account?
The Key is Investing in Strong Companies
There are plenty of companies like Apple that if you had been involved in the stock market in the stock market early you would be reaping the rewards right now. And many would say, "Well what about the recession?" Yes, even with the recession or depression you would have made money in the stock market. The key is investing in strong companies.
Here are a couple of examples of strong companies that you could have invested in 2002 and 10 years later you would have made money:
- McDonalds - The stock ticker symbol for McDonalds is MCD. Right now the stock is trading at around $95 per share. In 2002 it was trading as low at $28 per share. McDonalds is one of the strongest businesses in the world and I am confident that it will continue to be strong for years to come.
- Procter and Gamble - The ticker symbol for Procter & Gamble is PG. P&G is responsible for some of the most recognizable brands in the world like Tide, Head & Shoulders, Tampax, Charmin and more. At the moment P&G stock is trading at around $67 per share. In 2002 the stock was trading at around $44.
- Church and Dwight - The ticker symbol for Church & Dwight is CHD. This company, like P&G, has a large portfolio of very recognizable brands like Orajel, Arm & Hammer, Trojan, and more. The stock is currently trading at around $49 per share. Back in 2002 the stock was trading at around $10 per share.
- Altria Group Inc. - The Altria Group formerly Phillip Morris ticker symbol is MO. Altria group is responsible for the largest selling cigarette brand Marlboro. In spite of serious legal trouble and lack of advertising, this company still makes a profit. I know cigarettes are bad, but with regard to making a profit cigarettes are good. The Altria Group stock is trading at $30 per share. In 2002 the stock was trading at around $12.
- Coca Cola Inc - We all know about Coca Cola (ticker symbol:KO) since it is probably the #1 most recognized brands in the world. This company is not only responsible for Coke soft drinks, it makes Powerade, Vitamin Water, Sprite, Minute Maid and more. The stock is currently trading at $74. In 2002 the stock was trading at around $50 per share.
As you can clearly see if you invested in any of these companies you would have made a nice return on your investment. "If" you had invested 10 years ago. If you are staying out of the stock market because you do not know where to begin, I encourage you to do something about it so you won't be kicking yourself after another 10 years of inactivity.
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