In 1997, Amazon — then an unprofitable online bookstore — first went public. Fast-forward 20 years, and Amazon is now the largest internet-based retailer in the world.
For people who opted to take a chance on Amazon and invest in the company during its initial public offering (IPO), the investment has paid off — big time. According to Business Insider:
One thousand dollars invested at the closing price on Amazon’s IPO day would be worth over $491,000 on Monday, based on the stock’s price in early trading.
Here’s another way to look at it. I graduated from high school in 1997. Had I taken just $100 of my graduation gift money and invested it in Amazon, I would have stock worth roughly $63,990 now.
That impressive return on investment has left investors like Berkshire Hathaway CEO Warren Buffett kicking himself.
Amazon’s stock was priced at a mere $18 per share back in 1997, according to Investopedia. The e-commerce giant’s stock price has ballooned by about 50,000 percent since then. Amazon stock opened at $958.68 on the 20th anniversary of its IPO this year.
“I was too dumb to realize what was going to happen,” Buffett tells Business Insider, adding that he “underestimated the brilliance and the execution” of Amazon founder and CEO Jeff Bezos.
How to invest in stocks
Of course, hindsight is always 20/20. Are you a beginning investor trying to build up a stock portfolio? We can help you get started.
For example, although it may be tempting to pour all of your savings into stocks — especially when the market is hot and the returns are good — don’t do it, Marilyn Lewis warns in “9 Tips Beginning Investors Must Know.” She writes:
“It’s safer to spread risk among different types of investments. When one type of investment sinks, other types may rise, giving your portfolio a way to balance gains and losses.”
For more helpful advice, check out:
- “How to Get Started Investing When You Don’t Have Much Money“
- “13 Dumb Investing Moves and How to Avoid Them“
Have you missed out on a good investment or do you have advice to help others invest? Sound off below or on Facebook.