Amidst wild swings in major market benchmarks, it is often helpful to zoom out to a longer-term view of the markets. The following chart shows the growth of a $10,000 investment made in 21 different Dow 30 stocks between January 1982 and August 2015. (The other nine Dow components were not publicly traded in 1982.)
Data Source: Yahoo! Finance. Calculated using adjusted closing prices on August 3, 2015 and January 2, 1982.
There are perhaps a few surprises in the chart above:
- Home Depot (HD) has outperformed all other Dow stocks, including Apple (AAPL), by a wide margin;
- Even the worst performer in the group (IBM) would have turned a $10,000 investment into more than $200,000; and
- An investment in Exxon Mobil (XOM) would have growth to more than twice the value of Chevron (CVX) over this time period.
From these surprises, perhaps a few insights can be gained:
- The “simple” stocks sometimes surprise — the company selling hammers and nails has been a better long-term bet than the one that invented the iPhone;
- Historically, stocks have been a very good long-term investment; and
- The reward for correctly identifying the superior stock between a group of generally similar companies can be substantial. (This is, of course, incredibly hard to do.)
Does something else jump out at you from the chart above? Let us know in the comments below.
This article, Lessons From the Best Dow 30 Stocks, first appeared on Dividend Reference.