The Beginner’s Guide to Investing

If you invested $1,000 in Amazon 10 years ago, here’s how much you’d have now

Following a projected $6.59 billion in Cyber Monday sales, Amazon's stock has risen nearly 5 percent over the past week heading into the holiday season.

That sharp increase in value could explain why its founder and chief executive officer, Jeff Bezos, is now estimated to be the richest man in the world with a net worth of over $90 billion, according to industry estimates.

If you had invested in Amazon early on, when it first debuted on the Nasdaq in 1997, you could be worth a lot of money today, too. In fact, if you bought $1,000 in stock even 10 years later, in 2007, your investment would be worth $12,398 as of October 31 of this year.

That's according to financial website How Much, which took a look at some popular stocks in 2007 to find out how much a $1,000 investment in each would be worth now. Of the companies it examined, Amazon's performance was second only to the success of Netflix.

In the graphic below, the blue dots are equivalent to a $1,000 initial investment, and the pink dots equal the investment's current total value.

"The larger the pink circle, the more your investment is worth," according to How Much. "If the pink fits inside the blue, then you lost money. The [graphic] assumes that you took any dividend paid out in cash and did not reinvest into the company by buying more stock."

While stocks like Netflix, Amazon and Apple have performed well, any individual stock can over- or under-perform.

That's perhaps why Warren Buffett, the chief executive officer of Berkshire Hathaway, chose not to invest in Amazon when he had the chance. At Berkshire Hathaway's annual meeting in May, the self-made billionaire said he didn't appreciate the value of tech stocks at first.

"I was too dumb to realize. I did not think [Bezos] could succeed on the scale he has," Buffett said, adding that he "really underestimated the brilliance of the execution."

Citing Amazon's massive success, Buffett went on to call Bezos "the most remarkable business person of our age."

If you're looking to invest in the next Amazon, or if you're just starting to consider putting some money in the stock market, experienced investors like Buffett, Mark Cuban and Tony Robbins suggest you start carefully.

Begin with index funds, they say, which hold every stock in an index such as the S&P 500, including big-name brands such as Apple, Microsoft and Google, and offer low turnover rates, attendant fees and tax bills. Index funds also fluctuate with the market, stay pretty constant and eliminate the risk of picking individual stocks.

Investing for the first time can be a big step, and it can be risky. Past returns do not predict future results. But if you find the right stocks, it can lead to real rewards.

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