The Insurance Australia Group Ltd (ASX: IAG) share price has gone backwards over the past four years.
During January 2022, the insurance giant’s shares reached a multi-year low of $4.17 before moving in circles thereafter. While the company’s shares have ever so slightly recovered, they are still a long way off their pre-COVID levels.
Below, we calculate how much you would have made if you invested $10,000 in IAG shares four years ago.
What was the IAG share price in March 2018?
If you had invested $10,000 in IAG shares on this date in 2018, you would have bought them for $7.45 each. This would have given you around 1,342 shares, without making additional investments along the way.
Fast-forward to today and the current IAG share price is $4.44. This means that those 1,342 shares would be worth $5,958.48. When looking at percentage terms, this implies a loss of around 40%.
If you wanted to recoup the initial investment, IAG would have to climb 67% from here to reach $7.45 again.
What about the dividends?
IAG has made a sum of nine dividend payments including a special dividend from 2018 to 2022.
Adding those nine dividends payments gives us an amount of $1.215 per share. Calculating the number of shares owned against the total dividend payment gives us a figure of $1,630.53.
When putting both the initial investment gains and dividend distribution, an investor would have roughly $7,589.01.
In comparison, investing the same amount in the ASX 200 would have netted you a total figure of $12,960.20.
As you can see, investing in IAG would have still amounted to a loss of almost 25% when factoring in the dividends. While on the other hand, the benchmark index would have put you ahead by close to 30% over the four years.
Placing your money in an exchange-traded fund (ETF) is considered to be a much safer alternative. Investing in companies can reap great rewards but also lead to severe losses if not closely monitored.
It is crucial to assess and rebalance your portfolio each month to avoid negative returns.
The post Have IAG shares been a good investment? Here’s what $10,000 invested 4 years ago looks like now appeared first on The Motley Fool Australia.
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- Why is this broker ‘cautiously bullish’ on IAG (ASX:IAG) shares?
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Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns and has recommended Insurance Australia Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
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