So you’re wondering how much money you’d have now if you’d invested $10,000 in the stock of General Electric (NYSE: GE) — now doing business as GE Aerospace — 10 years ago. That’s a fine question, and the answer, according to theonlineinvestor.com is: $13,947 for the period from May 1, 2014, to May 1, 2024. If that’s sounding pretty good to you, know that it really isn’t. It reflects an average annual gain of about 3.4%, over a period when the S&P 500 index of 500 of America’s biggest and best companies averaged roughly 11.4%. (The S&P 500 would have turned your $10,000 into $29,407!)
If you had happened to reinvest your dividends from General Electric into more shares of General Electric, the picture gets better — a little: Your average annual gain would have been 4%, bringing your stake to a value of $14,793 after 10 years. (Of course, reinvesting dividends from an S&P 500 index fund would have got you an average annual gain of roughly 12.25%, totaling $31,817 after 10 years.)
You could have done wildly better in many other stocks, too. Recent superstar Nvidia, for example, averaged 69% annually over the period and would have turned your $10,000 into $1.9 million with dividends reinvested. Even a less mind-blowing stock, such as Lowe’s, averaged 19% (without reinvesting dividends), turning $10,000 into $54,123.
A key takeaway here is that if you’re ever not confident in whatever stock(s) you’re holding or thinking of holding, consider just opting for a simple, low-fee index fund, as it can help you build wealth powerfully over the long run without having to pick individual stocks, some of which will inevitably be losers. And don’t expect to run across performances such as Nvidia’s recent past very often, either.
General Electric used to be a well-respected blue chip stock — it was actually one of the 12 stocks in the Dow Jones Industrial Average when the index launched in 1896. It’s telling that GE was dropped from the Dow Jones in 2018, as it had been struggling and shedding many of its divisions, such as finance, healthcare, and even light bulbs –…
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