When you break it down, investing in the stock market is very simple: you buy a small piece of a company that you think will increase in value, and when the value has increased to a level you consider acceptable, you sell your share, receiving the increased value as income. One company popular among retail investors is Tesla, Elon Musk’s Texas-based electric car company, which is often in the news — sometimes for good and sometimes, much to the dismay of investors, for bad. This piece will take a look at how Tesla has fared over the past five years.
For more help with investing, consider working with a financial advisor.
Tesla is a car company led by CEO Elon Musk, a billionaire who also runs the rocket company SpaceX in addition to an unofficial side gig as a social media provocateur and amateur political commentator. Tesla makes electric cars, currently offering four different models, all of which are fully electric.
The company differs from most car manufacturers in that they sell directly to consumers. That Tesla store you see at your local mall is actually owned by the company, while most automakers sell their care at wholesale prices to independent dealerships, who in turn sell the cars to retail customers for a profit.
Tesla also has a network of Superchargers, select vehicle charging stations designed specifically for Tesla owners.
Tesla was founded in 2003 and went public in 2010. It is traded on the Nasdaq and is part of three different major indexes: the Nasdaq 100, the S&P 100 and the S&P 500.
As of the market close on September 14, 2022, Tesla had a capitalization of more than $929 billion and a single share was worth $302.61.
Where would you be if you had invested $1,000 in Tesla five years ago?
Unfortunately, there is no time machine that allows you to go back in time and invest in Tesla in 2017, but after reading this next section you might wish there was. On September 1, 2017, one share of Tesla was selling for $23.69. At the start of trading on September 1, 2022, the same stock opened at $272.58 – a gain of 1,150.61%. If you had invested $1,000 in Tesla on September 1, 2017 and not touched it until September 1, 2022, you could have sold it for $11,506.12, giving you about $10,500 in profit.
That’s not the whole story though. While most of us would like to make $10,000 by simply letting our money ride the market for 10 years, someone in the situation above actually lost money by not selling sooner.
Tesla’s five-year high was $414.50. This represents growth of 1,749.68%. If you had invested $1,000 on September 1, 2017 and sold at that high level, you would have made $17,496.83. That’s a total gain of nearly $16,500 and an additional $6,000 compared to holding the stock thus far.
How to invest in Tesla
Tesla’s growth over the past five years isn’t necessarily a sign that it will continue to grow. In fact, the past few months have seen the stock fall a bit, possibly due to Musk’s controversial statements and his current legal battle over his abandoned attempt to buy Twitter.
That said, if you want to invest in Tesla now, there are several ways you can do so. The simplest is to open a brokerage account with an online brokerage and buy directly. You may have to pay a transaction fee, but you can buy Tesla stock at the current trading price directly from anyone trying to sell it.
Another way is to invest in a mutual fund or exchange-traded fund (ETF) that buys Tesla stock. This will allow you to own Tesla while giving you built-in portfolio diversification. You can even invest in a fund that focuses on the technology or transportation sector, allowing you to invest in Tesla and other similar companies.
Finally, you can get a financial advisor to help you invest in Tesla. The advisor will do the actual buying for you (possibly through a third party broker) and can help you create a plan around the investment.
The bottom line
If you had invested $1,000 in Tesla five years ago, you would have about $11,500 right now. While you can’t be sure you’ll see similar results if you invest now, you can invest in Tesla today either directly, through a fund, or with the help of a financial advisor.
A financial advisor can help you invest your money the way you want, while also guiding you in the right direction. Finding a qualified financial advisor doesn’t have to be difficult. SmartAsset’s free tool matches you with up to three financial advisors serving your area, and you can interview your advisors at no cost to decide who is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
Want to see the trajectory of another investment? Use SmartAsset’s free investment calculator.
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