Unlimited compounding potential

June 19, 2024 3 min read

Best Performing Stocks in the S&P 500

Looking at the best performing stocks in the S&P 500 over the last five, ten, fifteen, and twenty years reveals some incredible returns. In the past five years, stocks like Super Micro Computer have surged 4000%, Nvidia Corporation by 3200%, and Tesla by 1200%. Other notable mentions include Builder FirstSource with 900%. Among the 500 stocks in the S&P 500, around 20 have seen gains between 300% and 4000% in just the last five years. Even having a few of these stocks could significantly boost a portfolio beyond the benchmark.

Incredible Returns Over a Decade

Source : Charlie Bilello

Over a ten-year period, the returns become even more impressive. The top-performing stock saw a gain of 25,000%. The 20th name on the list still achieved an impressive 1100% return, which means the original investment grew eleven times. These kinds of returns illustrate how just one exceptional stock can dramatically change an investor’s fortune. While specific stocks like Nvidia appear repeatedly across different time frames, many others change, highlighting the dynamic nature of the market.

Consistent High Performers Over Fifteen Years

When examining a fifteen-year period, Nvidia remains a standout performer with a gain of 44,000%. Netflix follows with 11,000%. The 20th name on this list, Eli Lilly, achieved a return of 3600%. The remarkable returns of these stocks underscore the potential for long-term gains in the stock market. However, the list of top performers is fluid, with many names appearing or disappearing across different periods.

The Power of Long-Term Investment

In a twenty-year span, Nvidia continues to lead with an astounding 65,000% gain, followed by Apple with 43,000% and Monster Beverage at 21,800%. Intuitive Surgical also performed exceptionally well, with a return of 20,000%. The 20th name on the list still achieved 3571%. These figures highlight the importance of a long-term investment strategy and the potential for massive compounding gains over time.

Changing Trends in Top Performers

One of the key takeaways is that the top-performing stocks change over time. For instance, Broadcom, which rose 500% in the last five years, does not appear in the top 20 for ten, fifteen, or twenty years. Similarly, Amazon, a major player, does not make the top 20 in the last five years but ranks with a 7000% return over twenty years. This indicates that stocks can experience periods of explosive growth followed by stagnation, emphasizing the need for a flexible investment strategy.

Importance of a Strategic Approach

Given the dynamic nature of the stock market, having a strategy that allows for adjustments based on performance is crucial. Momentum investing, which ranks stocks based on their past performance, can help capture high-growth stocks that may not initially appeal to value investors. Nvidia’s recent surge in popularity, despite its long-term gains, illustrates the potential of such strategies. Adopting the right investment approach can lead to substantial portfolio growth over time.

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