11 Stocks Plus Cash Saw $24,000 Grow To Over $1 Million

by: Pat Stout

Start in 1985 with a $2,000 investment in cash.

Make one $2,000 investment at the end of the year from 1986 through 1996.

Investments are assumed to be made in an IRA to shelter from taxes.

The first $2,000 was invested in cash to pay for commissions and other fees.

The average investor can save a tidy sum for retirement. It takes some luck, perseverance, and a buy and hold approach. The portfolio constructed would generate $22,400 in dividends for 2015.

The portfolio was constructed by entering stock symbols into a spreadsheet in random order. The model assumed a $2,000 a year investment from 1985 through 1996 or 12 years. The first-year investment of $2,000 was invested in cash to account for commissions and other fees. The results are not actual results, but hypothetical results. Dividends that would have been earned on investments have been ignored or assumed to have been invested in stocks that blew up and went to zero ($0.00).

The results generated most likely are influenced by a survivor basis. Nevertheless, the exercise proved useful. Data was obtained from company websites and or Yahoo Finance.

The performance results are handicapped by not accounting for dividends paid since purchase nor assuming they are reinvested. The portfolio results presented are conservative to consider a worst case rather than an unrealistic best case.

This is part one. The second part will cover the years 1998 through 2014.

The model portfolio is shown below.

Chart of the stock performance since inclusion into the model portfolio is shown below.

Kellogg (NYSE:K)

K Chart

K data by YCharts

Archer Daniels Midland (NYSE:ADM)

ADM Chart

ADM data by YCharts

Starbucks (NASDAQ:SBUX)

SBUX Chart

SBUX data by YCharts

The Home Depot (NYSE:HD)

HD Chart

HD data by YCharts

Exxon Mobil (NYSE:XOM)

XOM Chart

XOM data by YCharts

Stryker (NYSE:SYK)

SYK Chart

SYK data by YCharts

Caterpillar (NYSE:CAT)

CAT Chart

CAT data by YCharts

Charles Schwab (NYSE:SCHW)

SCHW Chart

SCHW data by YCharts


JPM Chart

JPM data by YCharts

Wal-Mart (NYSE:WMT)

WMT Chart

WMT data by YCharts

Microsoft (NASDAQ:MSFT)

MSFT Chart

MSFT data by YCharts

Bottom line:

With a little luck and experience, it is possible for a modest investment to grow into a nice nest egg.

What do you think?

Disclosure: The author is long ADM, SYK, SCHW, JPM, MSFT. The author wrote this article themselves, and it expresses their own opinions. The author is not receiving compensation for it (other than from Seeking Alpha). The author has no business relationship with any company whose stock is mentioned in this article.