Stocks

Growth of $10K: Comparing America’s 3 Major Stock Indices

Published

3 weeks ago

November 11, 2024

Marcus Lu

Graphics/Design:

Miranda Smith

See this visualization first on the Voronoi app.

Use This Visualization

Growth of $10K: Comparing America’s 3 Major Stock Indices

This was originally posted on our Voronoi app. Download the app for free on iOS or Android and discover incredible data-driven charts from a variety of trusted sources.

This graphic compares the performance of three of America’s biggest stock indices: the Nasdaq-100, S&P 500, and Dow Jones Industrial Average (DJIA).

More specifically, we visualized the hypothetical growth of $10,000 if it was invested in July 2007. This data was sourced from Curvo.

Data and Key Takeaways

All three of these U.S. indices have appreciated significantly since 2007, though as we can see in the graphic, the Nasdaq-100 is the clear winner. Note that you cannot invest directly in the index, though there are many investment products (e.g. ETFs) that track them.

Index	Initial Investment (July 2007)	Value as of Sept. 2024	Total Return
S&P 500	$10,000	$55,646	+456%
Nasdaq-100	$10,000	$117,073	+1,071%
Dow Jones Industrial Average	$10,000	$48,783	+388%

Here are brief descriptions of each of these three indices:

Nasdaq-100: Includes 100 of the largest non-financial companies listed on the Nasdaq stock exchange, focusing on technology, consumer services, and healthcare sectors.
S&P 500: Tracks the performance of 500 of the largest publicly traded companies in the U.S. across various sectors.
DJIA: Represents 30 major U.S. companies, historically focusing on industrial and consumer companies.

To see things from another perspective, we’ve also shown annualized returns over the 1-, 5-, and 10-year periods. Annualized return measures how much an investment would have grown on average each year.

Index	Last year	Last 5 years	Last 10 years
Nasdaq-100	+37.1%	+21.7%	+18.2%
S&P 500	+36.4%	+16.0%	+13.4%
DJIA	+28.8%	+11.8%	+12.0%

In other words, over the past 10 years, the Nasdaq-100 has climbed 18.2% each year on average. Thanks to the power of compound interest, this is a very significant uplift over the annualized returns of the S&P 500 and DJIA.

What is Driving the Nasdaq-100 Higher?

The Nasdaq-100 has outperformed the S&P 500 and DJIA due to its heavy concentration in high-growth technology and AI-focused companies.

Furthermore, low interest rates in the 2010s and COVID-19 era encouraged investment in growth stocks, particularly in tech, which helped boost the Nasdaq-100’s performance.

While the S&P 500 includes more companies (500 vs. 100), many of them do not drive positive returns. As we’ve shown in a graphic earlier this year, Nvidia, Microsoft, and Alphabet accounted for nearly half of the S&P 500’s 14.65% YTD gain as of June 13, 2024.