The “What if you had invested” research tool on the Sharebuilder site allows you to go back and calculate just how much money you would have gained or lost if you had invested a certain amount in a stock at any previous point in time.
I know someone who bought Google stock when it was $400. Many people thought it was overpriced then, quoting price-to-earnings ratios that presumably didn’t make sense. As I write this Google is trading at approx $700 per share. I imagine my friend is very happy right now.
I’m not an investor but occasionally look at a certain stock or stocks for some companies that interest me, and, at times, come home and announce to my wife that we simply have to buy stock in company x. We never do as we don’t extra cash lying around to invest, but now that I’ve discovered this tool I can go back and prove the investment wisdom that my recommendations had way back when (or alternately, I can play it cool and forget about it if they flop).
The tool allows you to select a stock symbol plus up to 4 others for benchmarking. It will let you define when your hypothetical investment would have taken place, whether or not you would have reinvested any dividends, and whether your initial investment would be supplanted periodically with additional investment. It will use the same scenario for all of the stock symbols you enter, and allows you to chart comparison indexes as benchmarks (DJIA, S&P 500, Nasdaq).
The screenshot above shows what would have happened if you had invested $10,000 in Amazon on Jan 1st, 2006, compared to investing in Google, Apple, Yahoo, and Palm. Quick: which one would have been the better investment? Apparently that would have been Apple, followed by Amazon, Google, Palm, then Yahoo. Hmm… kinda interesting as I would have thought Google would have been #2.
[I found this tool via TinyApps.org].
Update: We apologize, but this service no longer exists.