visaof (NYSE: V) Business performance is often directly correlated with the economy, which makes sense considering Visa is the world’s largest credit card network, helping move trillions of dollars around the world.
The general argument is that because the economy is often in growth mode, Visa is often growing, which makes Visa a great candidate as a reliable no-brainer stock to create shareholder value.
The past five years have been anything but smooth economic times, with periods of rapid growth followed by steep declines and finally the current inflationary trend. So if you had invested $1,000 in Visa stock, how much would it be worth today?
It will boost the economy, but can it boost your portfolio?
If you invested $1,000 in Visa stock five years ago, you’d have $1,767 today, including dividends. That’s not bad, and it represents a 77% return, but it’s less than you would have made had you invested in Visa stock. S&P 500, That comes to $2,015.
So does this mean you shouldn’t invest in Visa stock? Not so soon. Five years is a small fraction of Visa’s lifespan, and while it feels like a long time, I wouldn’t take this as an indication of Visa’s future prospects.
Looking back at other periods, Visa has crushed the overall market. If you invested $1,000 in Visa stock 10 years ago, you would have $5,711 today, but only $3,387 in the S&P 500. Looking ahead to the five years leading up to the pandemic, your investment in Visa would have grown to $3,257, compared to $1,681 for the S&P 500. Those five years have been turbulent, and while Visa has lagged the market, it can be trusted as a safe haven in times of economic turmoil.
Long-term investments require a period of 5 years or more if you want to enjoy the maximum benefits. The key to successful long-term investments is to start, grow your capital over time, and continue doing so, and Visa is the perfect stock to achieve this.
Should I invest $1,000 in Visa right now?
Before you buy Visa stock, consider the following:
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Jennifer Cybill has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Visa. The Motley Fool has a disclosure policy.
If You Invested $1,000 In Visa Stock Five Years Ago, Here’s How Much You’d Have Today originally appeared on The Motley Fool.
