The Beginner’s Guide to Investing

If you invested $1,000 in Facebook at its IPO, here's how much you'd have now

Investing in these stocks would have made you rich by now—here are other ways to invest your money
Investing in these stocks would have made you rich by now—here are other ways to invest your money

Stocks traded higher Wednesday after some major tech shares, including Apple and Facebook, saw steep losses earlier in the week.

On Tuesday, what are called FAANG stocks — Facebook, Apple, Amazon, Netflix and Google — were down more than 20 percent from their highs. But Facebook is now beginning to rebound.

And, despite all the recent volatility, an investment in the social-media giant at the time of its initial public offering on May 18, 2012, would have been a safe bet. A $1,000 investment then would be worth more than $4,600 as of Nov. 21, according to CNBC calculations, including price appreciation and dividend gains reinvested.

While Facebook's stock has performed well over the years, any individual stock can over- or under-perform and past returns do not predict future results.

And the company still faces a number of challenges.

CNBC: Facebook stock as of Nov. 20, 2018.

On Tuesday, Facebook shares hit their lowest level since February 2017 and were poised to close their third straight month in the red. That would mark the company's longest quarterly losing streak since 2013 and its first full year of losses since its IPO. Shares have declined about 25 percent so far this year.

This series of losses come amid for their handling of several high-profile issues, including and the scandal, and signs that the company may have a hard time continuing to grow at a rapid pace, especially as younger users peel off.

So many investors remain wary. "The market has been absolutely punishing companies with decelerating growth and that's exactly what you're seeing with Facebook," said Mark Tepper, chief executive officer of wealth-management firm Strategic Wealth Partners, on

"I don't think there's any light at the end of the tunnel anytime soon. They're making some pretty aggressive investments to deal with improving their ad transparency, getting rid of fake accounts, eliminating fake news, and that's going to be a drag on profits in the near term."

Here's how young people should invest their first $10,000
Here's how young people should invest their first $10,000

Greg Luken, chief executive officer at Luken Investment Analytics, said, "It's going to require a recovery in tech to make things happen. Where we are in tech, we're going to see tough sledding toward the end of the year. Stocks that are down will see further selling pressure."

However, there may good news to come. Facebook's recent drop could potentially be a value play in the long run, Tepper pointed out.

He said he finds the company's price-earnings to growth ratio — a measure of a stock's value by taking its price-earnings ratio and factoring in its earnings growth rate — reasonable: "If you have a two- to five-year time horizon, Facebook actually looks really attractive at these levels."

If you're or in the stock market in general, experienced investors like Warren Buffett, Mark Cuban and Tony Robbins , which hold every stock in an index, offer low turnover rates, attendant fees and tax bills. They also fluctuate with the market to eliminate the risk of picking individual stocks.

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Video by Andrea Kramar

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