The age of the smartphone was essentially owned by Apple (NASDAQ: AAPL). When founder and former CEO Steve Jobs took the stage in 2007 to introduce the iPhone, it was likely that even he did not know how influential the device would soon become. The following year, the company introduced the App Store, which created a completely new ecosystem and a sales channel that now collects $ 50 billion in sales per year.
It was an equally successful move for investors, as the company now trades with a market capitalization of more than $ 2 trillion. Obviously, stocks have made investors a lot of money in the last decade and created quite a few millionaires in the process. But how much did you have to invest a decade ago to be a millionaire today?
Looking back on Apple’s last decade
Although Apple is by far the most valuable company in the United States today, it was not so at the end of 2010. The honor at that time was ExxonMobil Apple claimed second place, but it was short-lived. Powered by the iPhone 4S sales launched at the end of 2011, Apple surpassed Exxon the following year and now has a market capitalization ten times higher than the oil company.
Assuming reinvested dividends, Apple shares have offered investors a gain of about 1,200%, or 29.2% per year, over the last decade. Including the initial investment, if you had invested $ 77,000 at the $ 11.50 break-even price a decade ago, the total investment would be worth about $ 1 million at current prices.
There is reason to believe that Apple will not stop soon. Led by current CEO Tim Cook, the company’s new strategy of monetizing its huge user base with high-margin subscription revenue is paying off in a major way. Look for this to continue: The company’s package service, called Apple One, was launched on October 30 and will begin to appear in the profit and loss account.
Apple can also increase revenue from its very important iPhone category. While iPhone growth has declined in recent years, this trend could be reversed in the current refresh cycle. Recent reports show that the company requested an increase in production of almost 30% in the first half of next year, probably based on the growing popularity of the new iPhone 12 compatible 5G model.
The hardest thing to do in investing is often nothing
It’s hard to imagine now, but Apple’s amazing decade has not been a straightforward one. In fact, there were times when the company performed poorly. In the last 10 years, the stock has suffered a maximum withdrawal of 46%, which is measured as the lowest value out of its maximum value. However, long-term investors have been rewarded.
The most successful investors are those who feel comfortable being uncomfortable, because most of the time the hardest thing to do in investing is nothing. However, there is a significant correlation with how long you hold an action and the probability of success. Long-term investors who can find high-quality companies that redefine their space will be rewarded.