The best-performing investments of the 2010s
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The economic environment in the 2010s may be most remembered as neither too hot nor too cold — perhaps exactly what the country needed in the wake of the worst economic crisis since the Great Depression. A steadily growing bull market broke longevity records, but the commodities market dropped by nearly 50% over the course of the decade.
In terms of asset growth throughout the 2010s, the stock market will get most of the credit for the record-setting economic upswing, but it was a different kind of asset class that rewarded turn-of-the-decade investors the most.
No asset performed better in the 2010s than bitcoin. If you invested $1 in bitcoin in the summer of 2010, you would have made a profit of $176,391.45 as of Jan. 21, according to the bitcoin profit calculator on Cryptoground.com, a return on investment of more than 17 million percent. For context, Netflix, the next-highest performing asset over the same period, had an ROI of 4,011% from 2010 through 2019.
After experiencing a boom in the previous decade, commodities largely underperformed in the 2010s. The price of crude oil dropped 26%, platinum dropped 38% and natural gas dropped a whopping 57%, according to data from investment firm RCM Alternatives. Despite being a depressing decade for commodities, there were a few outliers. The price of gold and copper remained relatively stable with 35% and 21% gains respectively, but no commodity surged like palladium, which saw a 354% ROI from 2010 to 2019.
One economic trend that helped define the economic climate of the 2010s was the country’s move toward energy independence — particularly the boom in oil and gas production via fracking and the continued shift toward renewable energy. While the utilities sector as a whole isn’t known for producing huge returns, there were a few companies that did. One such company, NextEra Energy, has invested heavily in renewable energy since 2005 and early investors have been rewarded as a result. NextEra stocks produced a 524.97% return from 2010 through 2019 — outperforming not only its peers in the utility sector but most stocks in the S&P 500 as well.
The S&P 500 was impressive during the 2010s. A Vanguard fund tracking the performance of the S&P 500 returned around 250% for the decade and finished higher than the previous year in every year except one (2018). Two S&P sectors responsible for a large chunk of the growth during that span were the consumer cyclical and technology stocks — sectors which finished with cumulative returns of 308.7% and 282.7%, respectively. In fact, they were the only sectors to outperform the S&P 500’s total return for the same period. No individual stock performed better for shareholders than Netflix, which was up 4,011% by decade’s end.
The early 2010s housing market was still reeling from one of the largest economic downturns in history, but home values have largely recovered since. The combined value of every residential home was $33.6 trillion at the end of 2019, up 51% ($11.3 trillion) from the start of the decade, according to Zillow.
Predicting which assets will perform well is really hard. Bitcoin’s value grew, but it underwent volatile ups and downs over the decade. Only a real expert could have even guessed which way the value of palladium would go in 2010, let alone that it would outperform oil.
The point is, investing in individual assets can be risky. That’s why many experts suggest putting most of your investing money in mutual funds that contain many assets. This way, if, say, Netflix goes under, your money is spread out among a bunch of other assets that can act as a hedge against any losses. Learn more in our guide to picking stocks.
Image: Dragos G (Getty)
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