It’s been exactly 12 years since the financial crisis sank the S&P 500 to its lows. But brave investors who knew how to find leading stocks since made life-changing amounts of money.
Had you put just $10,000 into the SPDR S&P 500 ETF Trust (SPY) on March 9, 2009, you’d be sitting on a stake now worth 468% more or $56,830. That works out to a gain of 15% a year on average over the 12-year period. All told, investors made $41 trillion from the lows, says Wilshire Associates. Not bad.
And yet, 10 stocks in the S&P 500, including health care darling DexCom (DXCM), industrial stalwart United Rentals (URI) and communications services firm Netflix (NFLX), did much better. All these jumped 5,000% or more from the panic-stricken depths of the financial crisis, says an Investor’s Business Daily analysis of data from S&P Global Market Intelligence and MarketSmith. And that’s not to mention IBD Long-Term Leader financial MarketAxess (MKTX).
In case you’re a new investor and don’t recall the financial crisis, just know it was ugly.
Souring mortgage loans and associated financial tools pounded the financial sector with losses. Some storied financial firms didn’t even survive. And some are only around now since the U.S. government bailed them out. Fear peaked at white-knuckled levels on March 9, 2009, by which time the S&P 500 lost more than half its value in less than two years.
But huge future winners to be found in the wreckage.
$10,000 In The S&P 500: Gains Found In Uncertainty
It might seen odd to recall a major crash with the S&P 500 just 2% away from a new high. But it’s a good milestone to remind you the awesome wealth-creating power of stocks — even when markets get choppy.
And wise sector bets fared better still. Technology stocks were only just starting a powerful run that cumulated in a mega-cap tech stock rally in 2020. The Technology Select Sector SPDR (XLK) ETF is up 884% from the depths of the financial crisis. Your $10,000 investment there is now worth $98,419.
Tech wasn’t even the top sector. The Consumer Discretionary Select Sector SPDR (XLY) is up 911% from 12 years ago. That’s the top showing of any S&P 500 sector in that time. And enough to make $10,000 into $101,142.
And interestingly, scooping up battered financials at the depths of the crisis didn’t do any better than the S&P 500. The Financial Select Sector SPDR (XLF) is up 440% from the lows, slightly underperforming the index.
Some individual S&P 500 stocks did even better still.
Top S&P 500 Management Matters
Surviving the financial crisis was tough enough. But finding a way to grow is even more respectable. And that’s where top notch managers like MarketAxess CEO Richard Mitchell stand out. Shares of the online bond trading platform are up a remarkable 8,016% from the 2009 low. That turned $10,000 into $807,535. That’s $400,000 more than you would have made putting $10,000 on Apple (AAPL) instead.
It’s especially impressive as the entire bond market was disrupted. Nonetheless, MarketAxess’ profit this year is seen hitting $8.49 a share this year, up more than 1,700% from 2009. The company’s profit didn’t fall even once in the 12 years following the financial crisis.
DexCom: The S&P 500 “Millionaire Maker”
Dream of being a millionaire? Those who bought DexCom, a maker of blood sugar monitoring gear, amid the financial crisis aren’t dreaming anymore.
A $10,000 investment in the company on March 9, 2009 is now worth $1.05 million or 10,390% more. No other S&P 500 company minted that much money. Much of it had to do with outstanding management turning this small company worth just $160 million in 2009 into a billion-dollar S&P 500 stalwart.
DexCom is on pace to post revenue of $2.3 billion this year, up more than 7,700% higher than it was in 2009. And the company is now profitable to the tune of more than $300 million last year and running commercials on the Super Bowl.
So stocks might get choppy like the Nasdaq did this month. But investors in for the long-haul know there are massive fortunes to be more for those who stay interested in the market and S&P 500.
Top S&P 500 Stocks From The Financial Crisis
|Company||Ticker||% Ch. From Crisis Low*||Sector||Value Of $10,000 Invested Now*||IBD Composite Rating|
|Align Technology||(ALGN)||8,088.4%||Health Care||818,841||91|
|Ulta Beauty||(ULTA)||7,803.3%||Consumer Discretionary||790,326||62|
|Domino’s Pizza||(DPZ)||6,079.8%||Consumer Discretionary||617,975||39|
Follow Matt Krantz on Twitter @mattkrantz
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