How The FTSE 100 Has Made You Rich Despite Being Lower Than 15 Years Ago

Don’t be fooled, the FTSE 100 (INDEXFTSE:UKX) may still have made you rich over the last 15 years, says Harvey Jones

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

It is now exactly 15 years since the FTSE 100 hit its all-time high of 6930, on Millennium Eve.

A lot has happened since, including the tech crash, 9/11 terrorist attacks, Iraq, the rise and fall of the BRICs, the credit crunch and all that followed, including rampant money printing and negative interest rates.

5 Stocks For Trying To Build Wealth After 50

One notable billionaire made 99% of his current wealth after his 50th birthday. And here at The Motley Fool, we believe it is NEVER too late to start trying to build your fortune in the stock market. Our expert Motley Fool analyst team have shortlisted 5 companies that they believe could be a great fit for investors aged 50+ trying to build long-term, diversified portfolios.

Click here to claim your free copy now!

If you had told somebody 15 years ago that Britons would finally discover a use for the Millennium Dome, they would have laughed in your face.

And if you had told them Britain’s index of leading stocks would actually be lower in 2014, they would have stared, amazed.

It’s Been A Great 15 Years

Here’s another thing they would have done: sold all their stock market investments in despair.

But that would have been a mistake. Because even though the headline number is still lower today, the FTSE 100 would still have returned more than 50% even if you had invested at the very worst possible time.

And if you had invested in the FTSE All Share, your total return would be more than 70%.

Since the vast majority of investors will have invested at much lower prices during the last 15 years, they will have done far better than that.

So a number that should destroy the case for investing in the stock market does precisely the reverse.

Imagine how much you would have made if the index was actually higher today?

How Income Grows

Dividends are a key reason the UK market can make you rich despite its apparent losing streak, but only if you reinvest them for growth.

If you had invested £10,000 in the FTSE 100 on 31 December 1999 and taken your dividends as income, you would have just £9,137. Ploughing them back into your shares hikes that to £15,213.

It’s a similar story with the FTSE All Share. Your £10,000 would be worth £10,500 if you had taken the dividends, £17,206 if reinvested.

With the FTSE 100 currently yielding a juicy 3.53%, the sums still work in your favour.

And you can earn yields of well over 5% a year from stocks such as BHP Billiton, BP, Centrica, GlaxoSmithKline, Royal Dutch Shell, Vodafone Group and WM Morrison.

Timing Isn’t On Your Side

If you had been lucky enough to invest £10,000 in the market at the best possible moment, 12 March 2003, and sold when the index hit its recent 52-week high of 6878 on 4 September 2014, you would have made a 218% return.

That would transformed your £10,000 into £31,800.

Timing the market in that way is impossible, unfortunately. The truth is most investors will have made somewhere in between.

They would have made a lot more than you might think over the last 15 years, but only by regularly reinvesting those dividends.

Is this little-known company the next ‘Monster’ IPO?

Right now, this ‘screaming BUY’ stock is trading at a steep discount from its IPO price, but it looks like the sky is the limit in the years ahead.

Because this North American company is the clear leader in its field which is estimated to be worth US$261 BILLION by 2025.

The Motley Fool UK analyst team has just published a comprehensive report that shows you exactly why we believe it has so much upside potential.

But I warn you, you’ll need to act quickly, given how fast this ‘Monster IPO’ is already moving.

Click here to see how you can get a copy of this report for yourself today

Harvey Jones has no position in any shares mentioned. The Motley Fool UK has recommended shares in Centrica and GlaxoSmithKline. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

More on Investing Articles

A Rolls-Royce employee works on an engine
Investing Articles

In penny stock territory, is the Rolls-Royce share price set to soar?

The Rolls-Royce share price has sunk recently, falling into penny stock territory. But with flying hours recovering, is it too…

Read more »

Hand of person putting wood cube block with word VALUE on wooden table
Investing Articles

Lloyds shares drop 20% in 4 months. Should I buy now?

Lloyds shares have lost a fifth of their value since peaking on 17 January this year. But after rebounding from…

Read more »

Warren Buffett at a Berkshire Hathaway AGM
Investing Articles

As the stock market recovery stalls, should I wait to buy?

Has the stock market recovery run out of steam? If so, what does that mean for our writer's portfolio? Here…

Read more »

Diagonal chain made of zeros and ones. Cryptocurrency and mining.
Investing Articles

At 55p, is the Argo Blockchain (LON:ARB) share price too cheap to miss?

With a low P/E ratio and strong financial results, could the Bitcoin miner be good value for money?

Read more »

macro shot of computer monitor with FTSE 100 stock market data in trading application
Investing Articles

Here are 2 recession-proof FTSE stocks!

In the face of current economic uncertainty and fears of a looming recession, this Fool identifies two recession-proof FTSE stocks.

Read more »

British Pennies on a Pound Note
Investing Articles

Here is 1 penny stock primed to benefit from the construction boom!

Jabran Khan delves deeper into a penny stock that he believes could benefit from the construction boom, and explains why…

Read more »

Various denominations of notes in a pile
Investing Articles

Here is 1 top passive income stock to buy and hold!

Jabran Khan wants to boost his passive income stream through dividends and has identified this insurance giant as a way…

Read more »

Cheerful young businesspeople with laptop working in office
Investing Articles

These are the 5 worst ways to invest in stocks

It's all too easy to lose money when you don't really know how to invest in stocks. Here are the…

Read more »