How a long-term approach to stock investments pays off in spades

INVESTING in stocks can be rewarding – if you are willing to hold them for the long term. But just how good can your returns be?

According to JPMorgan, from 1950 to 2023, the S&P 500 index delivered an annual average total return of 11.4 per cent. To put that in dollar terms, US$100,000 invested would increase to a little under US$870,000 in 20 years.

What if you invested in bonds instead? Over the same period above, bonds would produce a decent 5.3 per cent per annum in returns, but it’s less than half of what stocks can offer.