Investing

How much money you'd have now if you invested $500 in the stock market 10 years ago

Twenty/20

Investors have had plenty to celebrate lately: The U.S. stock market has set a series of new all-time highs, in what's been one of the best decades ever for investors.

Among the best things about investing in the past 10 years is that your timing didn't matter so much. Sure, there have been rough patches for the S&P 500 — the primary benchmark for the U.S. stock market — but it's always recovered.

In fact, a $500 investment in an exchange-traded fund (ETF) that tracked the performance of the S&P 500 made on July 31, 2009, would be worth more than $1,850 as of July 30, 2019, according to calculations by Grow. That works out to a return of more than 270%.

Rather than just calculating the change in price (which is about 204% in that time period), we've calculated the total return. That assumes you reinvested the dividends you earn each quarter.

When you own a fund, or an individual stock, you'll usually be paid a quarterly dividend — a portion of that company's or fund operator's profit — that you can use to buy more shares. Your returns will be greater when you reinvest your dividends over the long run, so that's an easy way to grow the value of your portfolio.

Why a buy-and-hold strategy pays off

Buying an asset like an index fund and then holding on to it for years is a simple but effective approach to investing championed by, among others, investing legend Warren Buffett.

The U.S. stock market has been rising pretty steadily since 2009, even with some bumpiness along the way. That's why a buy-and-hold index fund strategy would have paid off in the past 10 years: You would have bought at the lowest price for an S&P 500 ETF in the past decade and then given yourself time to benefit from the market's rally.

In addition to a buy-and-hold approach, experts generally recommend that you continue regularly adding money to your portfolio. That way you have time on your side, a key for long-term investing success, and you'll potentially buy at times when stock prices are lower.

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All investments involve risk, including loss of principal. The contents presented herein are provided for general investment education and informational purposes only and do not constitute an offer to sell or a solicitation to buy any specific securities or engage in any particular investment strategy. Acorns is not engaged in rendering any tax, legal, or accounting advice. Please consult with a qualified professional for this type of advice.

Any references to past performance, regarding financial markets or otherwise, do not indicate or guarantee future results. Forward-looking statements, including without limitations investment outcomes and projections, are hypothetical and educational in nature. The results of any hypothetical projections can and may differ from actual investment results had the strategies been deployed in actual securities accounts. It is not possible to invest directly in an index.

Advisory services offered by Acorns Advisers, LLC (“Acorns Advisers”), an investment adviser registered with the U.S. Securities and Exchange Commission (“SEC”). Brokerage and custody services are provided to clients of Acorns Advisers by Acorns Securities, LLC (“Acorns Securities”), a broker-dealer registered with the SEC and a member of the Financial Industry Regulatory Authority, Inc. (“FINRA”) and the Securities Investor Protection Corporation (“SIPC”). Acorns Pay, LLC (“Acorns Pay”) manages Acorns’s demand deposit and other banking products in partnership with Lincoln Savings Bank, a bank chartered under the laws of Iowa and member FDIC. Acorns Advisers, Acorns Securities, and Acorns Pay are subsidiaries of Acorns Grow Incorporated (collectively “Acorns”). “Acorns,” the Acorns logo and “Invest the Change” are registered trademarks of Acorns Grow Incorporated. Copyright © 2019 Acorns and/or its affiliates.

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