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Time indeed flies. Incredibly, we’re only a few months away from the six-year anniversary of the pandemic-induced stock market crash from 2020.
In the years that followed, we’ve experienced sharp movements in interest rates, a global trade war, the rise of artificial intelligence (AI), and much more. If someone invested during the crash almost six years back, here’s what it would be worth now…
A healthy profit
I’m going to assume investors parked £1k in the FTSE 100 at the beginning of March 2020, when the index was trading at 6,462 points. This isn’t at the lows of the crash we were experiencing in April, just below 5,000 points. This is because I think it’s unrealistic to predict that someone would have perfectly bought at the best level.
If we fast forward to the present day, the index is at 9,890 points. This represents a gain of 53% in just under six years, making £1k worth £1,530. Of course, this is an unrealised gain. The profit would only be banked when the investor sold the index tracker.
It represents an impressive return, but it might surprise some to learn that 21% of this has come in just the past year. In reality, the bulk of the 53% came from 2024 and 2025.
Over the same time period, the S&P 500’s up 146%. I had to double-check the figures there, as I wasn’t anticipating it to outstrip the FTSE 100 by that much. Yet most of the benefit from the rise of AI has come from the US stock market, given related stocks like Nvidia are listed across the pond.
Flying high
The past can’t be repeated, but I can look for stocks that have done well over the past few years that have momentum to continue for the long term. For example, consider the International Consolidated Airlines Group (LSE:IAG). Over the past five years, the stock’s up 158%, with a 39% gain in the last year.
The business struggled during the pandemic due to the lockdowns and lack of travel demand. However, as the world returned to normal, both business and leisure travel recovered.
I actually think the company is in a better place now than it was before the pandemic. It has worked hard to cut costs and become a much more streamlined operation. This helped it to survive the tricky period from 2020 to 2022, but now means it’s well placed for the coming few years.
Not only has IAG stock beaten the broader market over the period in question, but I think it could do so over the next few years as well. It has an increasingly strong balance sheet, with net debt now well below 2020 levels. This is despite taking on billions during the pandemic.
The management team’s pursuing a growth strategy. Evidence of this can be seen in the bid for TAP Portugal last month, which would certainly help further strengthen its position in the market.
In terms of risks, a global economic slowdown next year could lead to a decrease in business travel. This is a key part of IAG revenue. Even with this concern, I think it’s a good example of a company that investors could consider for long-term growth.
