If you invested $1,000 in Tesla 5 years ago, you would have $4,973 today, a gain of 397%

Tesla stocks continued to fall, down 13% on Tuesday, a day after the electric auto the creator reports car production and delivery figures for the fourth quarter of 2022.

The company sold just 405,000 cars in the final three months of 2022, missing Wall Street analysts’ estimate of 420,000.

However, even with such significant losses, Tesla has seen great growth since its inception.

The company first went public in 2010 at $17 per share and hit just over $400 per share at its all-time high in November, 2021. Valued at over $300 billion, Tesla is recognized as one of the most valuable car companies in world.

How much would you have if you invested $1,000 five years ago

For shareholders who acquired Tesla stock early, these short-term declines won’t erase their long-term gains.

On January 2, 2018, a share of Tesla was trading at $21.37. On January 3, 2023, one share was trading at $108.10, which is an increase of 405%. So if you invested $1,000 five years ago, you have $4,973 today, which is a $3,973 profit.

Even if you didn’t invest five years ago and instead chose to use your stimulus check or postpone student loan payments to invest on May 1, 2020 when share prices hit $46.75, the your investment will increase by almost 80% for a total amount of $2,270.

Timing the market and trying to get into a stock at the right time is not guaranteed to lead to great luck. The stock market is unpredictable and no one knows how your investments will respond to world events, natural disasters, or economic downturns. Past performance does not always indicate how a stock will increase or decrease over time.

The truth is that the longer you stay invested, the more time your money has to grow and work for you thanks to the magic of compound interest.

What to consider before investing in a company

If you’re thinking of investing in Tesla or another company you want to get behind there are some considerations you should make.

  1. Don’t invest more than you are comfortable with. Knowing how much to invest will ultimately depend on how comfortable you are with the market and how okay you are with losing if things don’t work out in your favor. As a general rule, experts suggest investing between 15% and 25% of your after-tax income. Of course, this varies from person to person and you should make it a point to re-evaluate from time to time to make sure this strategy still works for you and adjust if your financial circumstances change. “The percentage of that going into stocks is determined by the length of time before the money is needed and the tolerance for volatility,” said Paul Peeler, financial advisor at Integrated Financial Group. “The longer the time frame and the higher the tolerance, the higher the percentage will be in stocks. And vice versa.”
  2. Don’t try to use past performance to dictate future earnings. Just because an investment has done well or performed well in the past does not mean you stand to win big in the future. When choosing a stock to invest in, you should do your research and look at a company’s price history, earnings, and projections, but remember that your decision is about what to invest and how much to invest. based on your risk tolerance, time. horizon, and investment objectives.
  3. You don’t need to tie up all your money in one company’s stock. There are ways to get exposure to investments in many young companies without putting all your money behind one. “A globally diversified portfolio of index funds will own some young companies by default, so by that criteria everyone should own some young companies, ” said Peeler. “But very few people should have a large portion of their investment mix tied directly to young companies.”

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