What Would Have Been a Good Stock to Buy 10 Years Ago

Many of the big tech companies have had a good run over the past decade. Apple, Microsoft, Google (Alphabet), Amazon, Facebook, Netflix - over 10 years, these companies have provided a pretty decent return on investment (ROI). However, it's important to remember that past performance does not necessarily predict future results.

Tracking 10 Years of Market Performance

Try googling the text: best performing stock of the last ten years and you’ll likely find articles like The 10 Best and 10 Worst Stocks of This 10-Year Bull Market. This period can certainly be considered a good time to invest.

The Market Context of 2009

Ten years ago, in 2009, the markets were just starting to recover from the Great Recession. Investor sentiment favored large-cap, dividend-paying stocks, as they offered relatively stable returns. Companies like Microsoft, Apple, Procter Gamble, and Exxon Mobil were available at fire-sale prices. Investing in these stocks during this period would have resulted in significant gains over the 2009-2019 period.

Investing Strategies and Best Stocks

The concept of a good stock can vary depending on what you’re seeking: highest appreciation, best dividend growth, or least volatile. I’ll focus on companies that grew the most over the past decade.

Jazz Pharmaceuticals (JAZZ)

Jazz Pharmaceuticals was a volatile small-cap stock 10 years ago with a struggling anti-depressant, Luvox. Since then, the company secured FDA approval on a breakthrough drug, Defitelio, which treats hepatopulmonary veno-occlusive disease. Over the past 10 years, the stock price has risen from 0.60 to 133.65, representing an almost 23,000% increase.

Amazon and Visa

For those seeking capital appreciation, Amazon would be the top choice. For those prioritizing dividend growth, Visa would be more suitable.

Bitcoin

Bitcoin definitely deserves a mention. I only wish I had invested more in it during the past decade. Even though hindsight is 20/20, it's prudent to allocate a small portion of your net worth to Bitcoin. It’s clear that the supply and demand dynamics have been favorable, and the crypto market continues to grow. Bitcoin may sound like a speculative investment, but as I've held onto it through multiple market corrections, it has proven to be a sound long-term asset.

Bitcoin has its share of critics who argue it’s a fraud or a bubble. However, the same arguments apply to fiat currency, which is also a form of bubble. Holding onto your investments and sticking to a long-term strategy (HODL) is generally a sound approach. The digital gold bubble has not popped in the last decade, and it’s likely to continue being a valuable asset in the future.

Consider the factors that make Bitcoin a good investment: supply dynamics, mining technology, and demand from various markets. Don’t let short-term fluctuations or negative opinions sway your decision. Remember, buying and holding, or HODLing, is a proven strategy in this volatile yet promising market.