$10,000 in Tesla When It Joined the S&P 500 Would Be About $15,700 Today. An Index Fund Would Have Done Better.
Index funds effectively paid a record $695 a share for the electric-vehicle giant in December 2020. Was it worth it?
Overview
On Friday, Dec. 18, 2020, shares of electric-car maker Tesla (NASDAQ:TSLA) rose almost 6% to close at a record $695. More than 200 million shares changed hands that session (more than $131 billion of stock), making it one of the busiest trading days in the company's history.
The buying wasn't optional for everyone. S&P Dow Jones Indices had scheduled Tesla to join the S&P 500 (SNPINDEX:^GSPC) at its full weight before the market opened the following Monday. And the addition was based on that Friday's closing prices. In other words, every fund tracking the index effectively paid $695.
Details
Nearly six years later, that $10,000 would have become about $15,700. The same money in an S&P 500 index fund would have grown to about $20,500 before dividends.
Source
Originally published at www.fool.com.