Image source: Getty Images <\/p>\n
The stock market\u2019s one of the most powerful wealth-building tools in modern society. It can occasionally turn into a rollercoaster ride in the short term with stories of stock crashes and volatility. But when compounding is left to work its magic over the long run, patient investors can find themselves immensely rewarded.<\/p>\n
Even in the last five years, US stocks have been a terrific place to park some capital despite all the chaos caused by inflation and interest rates. So how much money have investors made since the post-peak-pandemic summer of 2020?<\/p>\n
Let\u2019s say it\u2019s June 2020, and an investor has \u00a310,000 sat in a savings account and decide to put it into a low-cost S&P 500 <\/strong>index tracker fund. Initially, things start off quite well, climbing by over 60% by the start of 2022.<\/p>\n Of course, then inflation came along, triggering a massive stock market correction that persisted for almost the entire year. But eventually, the US economy got back on its feet as inflation cooled. By this June, despite the ups and downs, the total return of the S&P 500 over the five years reached 113%.<\/p>\n That means the \u00a310,000 initial investment is now worth \u00a321,300. Not bad \u2013 but how did stock pickers do?<\/p>\n It\u2019s harder to pinpoint how well individuals performed during this period because that ultimately depends on which stocks they decided to buy. Those who thought Beyond Meat<\/strong> was going to revolutionise the way we eat meat products have been left severely disappointed, losing almost all of their investment.<\/p>\n But those who backed Crowdstrike<\/strong> (NASDAQ:CRWD) and its artificial intelligence (AI)-powered cybersecurity platform have been rewarded with an enormous 400% gain.<\/p>\n With the company sucessfully launching new powerful defence solutions for its modular Falcon platform, the company\u2019s been driving up customer spending drastically in the last five years. That\u2019s translated into an explosive 46% average revenue growth rate since 2020, with earnings reaching borderline profitability.<\/p>\n In fact, the company\u2019s expanded so much that it recently graduated, becoming an S&P 500 member last year. And subsequently, a \u00a310,000 investment\u2019s now worth over \u00a350,000!<\/p>\n Cyber attacks are becoming increasingly sophisticated, and AI-powered solutions are now mission critical for many enterprise customers. That\u2019s certainly a powerful tailwind Crowdstrike\u2019s already capitalising on. In other words, the growth story looks far from over.<\/p>\n Expecting another 400% gain by this time in 2030 might be a bit optimistic, given the firm now has a market-cap of $116bn. However, if left to run for longer, this isn\u2019t out of the realm of possibility. Of course, as with every investment, nothing\u2019s guaranteed.<\/p>\n Despite having over 20,000 customers, the bulk of its annual recurring subscription revenues come from its much smaller list of enterprise-scale customers. Losing some of these key clients due to a security breach or another catastrophic software update, like the one in 2024, could slam the breaks on growth. And with the stock trading at a lofty valuation, downward volatility\u2019s almost a certainty in this scenario.<\/p>\n Nevertheless, the long-term growth potential makes this risk potentially worth taking, in my opinion. So investors comfortable with a bit of share price volatility may want to consider taking a closer look.<\/p>\n The post \u00a310,000 invested in the US stock market 5 years ago could now be worth\u2026<\/a> appeared first on The Motley Fool UK<\/a>.<\/p>\n More reading<\/strong><\/p>\n Zaven Boyrazian has positions in CrowdStrike. The Motley Fool UK has recommended CrowdStrike. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.<\/a><\/p>\n Motley Fool UK 2025<\/p>\n","protected":false},"excerpt":{"rendered":"Image source: Getty Images The stock market\u2019s one of the most powerful wealth-building tools in modern society. 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