Markets
A Decade Later: What $1K Invested in These Stocks is Worth Today
On October 11, 2007, the Dow Jones Industrial Average hit a new high of 14,198.10 in intraday trading.
At the time, it would have been impossible to know, but such a peak wouldn’t again be matched until 2013, almost six years later. Investors were in for a roller coaster, and a slow and unpredictable recovery – how would their portfolios fare?
Investing at the Market Peak
Hypothetically, let’s say that you bought $1,000 of shares in some of America’s best-known companies, right during these pre-crisis highs in October 2007.
Today’s chart from HowMuch.net shows how you would have fared based on share price alone, not including the re-investment of dividends. Each blue dot below shows the $1,000 investment, and each pink circle represents the value of that investment today.
If you’d had invested in Netflix around the time company launched its streaming service in the United States, you would have brought in 50X your initial investment.
Meanwhile, Amazon shares jumped over 10X in value, and even “boring” blue chip companies like FedEx or McDonald’s at least doubled in value. The only company worth less (on the above list) is GE, though it’s worth noting that they would have also paid a dividend over this timeframe.
Common Wisdom?
Historically speaking, over long-term windows, the stock market has almost always increased in value. But for people that bought in October 2007, it would have felt like the world was ending and that a recovery was nearly impossible.
While it can certainly be argued that asset prices were inflated through QE, record-low interest rates, and other controversial central bank tactics from the crisis onwards, in hindsight it is also clear that a portfolio formed at the 2007 peak would have turned out alright today.
Of course, I think we all would agree that it would have been a lot nicer to invest at rock-bottom prices in 2009. However, it’s nice to know that holding stocks through the crisis ultimately paid off for those that had the patience to do so.
As the current market gets more and more expensive, this may be something worth keeping in mind.
Markets
The Top Google Searches Related to Investing in 2022
What was on investors’ minds in 2022? Discover the top Google searches and how the dominant trends played out in portfolios.
The Top Google Searches Related to Investing in 2022
It was a turbulent year for the markets in 2022, with geopolitical conflict, rising prices, and the labor market playing key roles. Which stories captured investors’ attention the most?
This infographic from New York Life Investments outlines the top Google searches related to investing in 2022, and offers a closer look at some of the trends.
Top Google Searches: Year in Review
We picked some of the top economic and investing stories that saw peak search interest in the U.S. each month, according to Google Trends.
| Month of Peak Interest | Search Term |
|---|---|
| January | Great Resignation |
| February | Russian Stock Market |
| March | Oil Price |
| April | Housing Bubble |
| May | Value Investing |
| June | Bitcoin |
| July | Recession |
| August | Inflation |
| September | US Dollar |
| October | OPEC |
| November | Layoffs |
| December | Interest Rate Forecast |
Data based on exact searches in the U.S. from December 26, 2021 to December 18, 2022.
Let’s look at each quarter in more detail, to see how these top Google searches were related to activity in the economy and investors’ portfolios.
Q1 2022
The start of the year was marked by U.S. workers quitting their jobs in record numbers, and the effects of the Russia-Ukraine war. For instance, the price of crude oil skyrocketed after the war caused supply uncertainties. Early March’s peak of $125 per barrel was a 13-year high.
| Date | Closing Price of WTI Crude Oil (USD/Barrel) |
|---|---|
| January 2, 2022 | $76 |
| March 3, 2022 | $125 |
| December 29, 2022 | $80 |
While crude oil lost nearly all its gains by year-end, the energy sector in general performed well. In fact, the S&P 500 Energy Index gained 57% over the year compared to the S&P 500’s 19% loss.
Q2 2022
The second quarter of 2022 saw abnormal house price growth, renewed interest in value investing, and a bitcoin crash. In particular, value investing performed much better than growth investing over the course of the year.
| Index | Price Return in 2022 |
|---|---|
| S&P 500 Value Index | -7.4% |
| S&P 500 Growth Index | -30.1% |
Value stocks have typically outperformed during periods of rising rates, and 2022 was no exception.
Q3 2022
The third quarter was defined by worries about a recession and inflation, along with interest in the rising U.S. dollar. In fact, the U.S. dollar gained against nearly every major currency.
| Currency | USD Appreciation Against Currency (Dec 31 2020-Sep 30 2022) |
|---|---|
| Japanese Yen | 40.1% |
| Chinese Yuan | 9.2% |
| Euro | 25.1% |
| Canadian Dollar | 7.2% |
| British Pound | 22.0% |
| Australian Dollar | 18.1% |
Higher interest rates made the U.S. dollar more attractive to investors, since it meant they would get a higher return on their fixed income investments.
Q4 2022
The end of the year was dominated by OPEC cutting oil production, high layoffs in the tech sector, and curiosity about the future of interest rates. The Federal Reserve’s December 2022 economic projections offer clues about the trajectory of the policy rate.
| 2023 | 2024 | 2025 | Longer Run | |
|---|---|---|---|---|
| Minimum Projection | 4.9% | 3.1% | 2.4% | 2.3% |
| Median Projection | 5.1% | 4.1% | 3.1% | 2.5% |
| Maximum Projection | 5.6% | 5.6% | 5.6% | 3.3% |
The Federal Reserve expects interest rates to peak in 2023, with rates to remain elevated above pre-pandemic levels for the foreseeable future.
The Top Google Searches to Come
After a year of volatility across asset classes, economic uncertainty remains. Which themes will become investors’ top Google searches in 2023?
Find out how New York Life Investments can help you make sense of market trends.
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