If you invested $1,000 in Microsoft just ten years ago this is how much you could have today
Many of the most successful investments are made when there's room for growth, yet it's surprising quite how much you could possibly earn over a ten-year period by buying up $1,000 in Microsoft stock.
Microsoft hasn't just been around for decades but has been among the world's most valuable companies for much of that time, yet you can still extract a lot of money by playing it 'safe' on the market through the company founded by Bill Gates.
Foresight is obviously a privilege when it comes looking at successful investments – as anything could have happened to Microsoft in the last decade that would have made it a bad deal – but it's always fun to look back on what you could have earned from all those years ago.
Key to the growth that Microsoft has achieved over this time period is its expansion into enterprise cloud computing with Azure, alongside the dominant position it holds in the AI industry — something that many other tech giants have similarly benefitted from alongside the Windows creator.
How much would you have if you invested $1,000 a decade ago?
Based on the average stock price of $56 back in September 2016, investing $1,000 would leave you with roughly 18 shares, which equates to a jaw-dropping return of $8,888.94 with the current price of $493.83.
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This represents a growth in investment of 788.89% – which is impressive even across a lengthy 10-year period, considering most stocks only increase by between 8-10% annually – and you have the massive spikes over the last five years to thank for that.
You could have even increased this further by reinvesting the dividends that you'd earn from your stocks, resulting in a figure that's closer to $9,938 on average.
This is far higher than the return you'd have received from investing $1,000 in the S&P 500 across the same time period, but it's not something that you can guarantee will be replicated, and comes with a number of a risks that could dissuade you from trying it again with eyes on 2036.
Why it's not as simple as the numbers suggest
As mentioned, it's easy to look at massive wins by thinking of what you could have if only you'd invested wisely in the past, but every investment comes with a risk that the best investors try to mitigate as much as possible.
It's common knowledge that placing too much capital into a single company – even one with the reputation of Microsoft – isn't the wisest idea as you run the danger of your bids not playing off in the long run.
Additionally, while we're in a period of growth for Microsoft right now, there have been equal stretches where the stock price has tanked, making you second guess whether your bet was a good idea.
Something you'll also have to consider is the potential for long-term capital gains taxes that you'd encounter if you tried to extract your investments all at once, and that could eat into your profits significantly — especially if you're already a high earner.