It may surprise you that every dollar you invest in a superb growth stock can end up generating great wealth.
A strong business can continue growing both its top and bottom lines over the years.
And with growing profits, investors are also willing to pay a higher share price for the business.
It’s an interesting exercise to look back 10 or more years ago to see how much a dollar could have multiplied had you stayed invested in the same stock.
We performed this exercise with United Overseas Bank Ltd (SGX: U11), or UOB, late last year and also with Singapore Technologies Engineering Ltd (SGX: S63), or STE, in the middle of last year.
UOB provided a 10-year compound annual growth rate (CAGR) of 7.9% while STE yielded a 12-year CAGR of 4.9%.
Let us now look at Netflix (NASDAQ: NFLX) to figure out how much you would have today if you had invested in the streaming TV giant back in 2013....