What would happen if you invested $100 a week in the stock market?
Chuck Saletta, The Motley Fool, newsfeedback@fool.com
What would happen if you invested $100 a week in the stock market?
Image source: Getty Images
What would happen if you invested $100 a week in the stock market?
Chart by author, based on data from Yahoo! finance
What would happen if you invested $100 a week in the stock market?
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Real estate, like nearly every aspect of our lives, took plenty of blows during the pandemic.
People fled big cities and, freed up by working remotely, clamored for homes in the suburbs. Locked-down families craved more space, landlords fretted over collecting rent from tenants struggling with unemployment, and commercial storefronts and office space sat empty.
Now as we look ahead, real estate is considered a bellwether for the future of an economic recovery, population migrations, consumer demand, and more.
Roofstock selected 10 emerging real estate trends in 2021, using data from the Emerging Trends in Real Estate 2021 report compiled by PwC and the Urban Land Institute. The trends cover topics such as investment prospects, notable real estate markets, population migration, and the effects of COVID-19 on residential and commercial real estate. The trends in this report are based on interviews and surveys of more than 1,600 people who work in real estate advisory, investing, lending, or real estate development.
Trends in real estate are intertwined. Construction costs are high as commodities are expensive and supply chains are disrupted. Consumers' shopping habits have altered demand for brick-and-mortar shops, warehouse space, and online goods distribution centers. Rents are soaring, and houses in some places are sold within days, well over the asking prices. Keep reading to see how these elements are influencing emerging trends in real estate this year.
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Real estate, like nearly every aspect of our lives, took plenty of blows during the pandemic.
People fled big cities and, freed up by working remotely, clamored for homes in the suburbs. Locked-down families craved more space, landlords fretted over collecting rent from tenants struggling with unemployment, and commercial storefronts and office space sat empty.
Now as we look ahead, real estate is considered a bellwether for the future of an economic recovery, population migrations, consumer demand, and more.
Roofstock selected 10 emerging real estate trends in 2021, using data from the Emerging Trends in Real Estate 2021 report compiled by PwC and the Urban Land Institute. The trends cover topics such as investment prospects, notable real estate markets, population migration, and the effects of COVID-19 on residential and commercial real estate. The trends in this report are based on interviews and surveys of more than 1,600 people who work in real estate advisory, investing, lending, or real estate development.
Trends in real estate are intertwined. Construction costs are high as commodities are expensive and supply chains are disrupted. Consumers' shopping habits have altered demand for brick-and-mortar shops, warehouse space, and online goods distribution centers. Rents are soaring, and houses in some places are sold within days, well over the asking prices. Keep reading to see how these elements are influencing emerging trends in real estate this year.
What would happen if you invested $100 a week in the stock market?
sculpies // Shutterstock
As jobs come back across the U.S., people who were renting may find themselves able to take out home loans, adding more buyers to an already competitive market. Some experts have predicted the housing shortage will continue for years before self-correcting.
While building slowed during the pandemic, construction costs—both labor and materials—soared. Many of the price rises were a result of worker shortages and disruptions in supply chains for commodities and raw materials. The price of lumber, as one example, rose by more than a third. Costs continue to be high, compounded by a shortage of skilled labor.
sculpies // Shutterstock
As jobs come back across the U.S., people who were renting may find themselves able to take out home loans, adding more buyers to an already competitive market. Some experts have predicted the housing shortage will continue for years before self-correcting.
While building slowed during the pandemic, construction costs—both labor and materials—soared. Many of the price rises were a result of worker shortages and disruptions in supply chains for commodities and raw materials. The price of lumber, as one example, rose by more than a third. Costs continue to be high, compounded by a shortage of skilled labor.
What would happen if you invested $100 a week in the stock market?
Gorodenkoff // Shutterstock
A 2020 survey from Ernst & Young Global Limited found 33% of consumers anticipated shifting more to online shopping; in 2021, nearly 40% said they are still shopping at physical stores less than before the pandemic started. Consumers are showing less tolerance for service disruptions linked to the coronavirus. Just one in five of those surveyed said they are forgiving retailers for such disruption.
COVID-19 has also elevated the discussion around how critical public open spaces are and the disproportionate access different demographics have to them. Roughly 100 million Americans do not live within 10 minutes of a park—a statistic that came into sharp focus in 2020. Restaurants setting up outside seating, along with surges in discussions around and demand for more open spaces, are driving infrastructure projects that will answer that need from coast to coast.
Gorodenkoff // Shutterstock
A 2020 survey from Ernst & Young Global Limited found 33% of consumers anticipated shifting more to online shopping; in 2021, nearly 40% said they are still shopping at physical stores less than before the pandemic started. Consumers are showing less tolerance for service disruptions linked to the coronavirus. Just one in five of those surveyed said they are forgiving retailers for such disruption.
COVID-19 has also elevated the discussion around how critical public open spaces are and the disproportionate access different demographics have to them. Roughly 100 million Americans do not live within 10 minutes of a park—a statistic that came into sharp focus in 2020. Restaurants setting up outside seating, along with surges in discussions around and demand for more open spaces, are driving infrastructure projects that will answer that need from coast to coast.
What would happen if you invested $100 a week in the stock market?
scarp577 // Shutterstock
City residents started heading for the suburbs to work remotely when the pandemic hit, and they are continuing to do so. Many in this demographic are largely moving to suburbs close to cities—such as New Yorkers moving to New Jersey or Connecticut—leaving the option to return to the office part time. A suburb close to the city also offers access to urban amenities. Experts say demand will continue to grow for single-family suburban houses.
scarp577 // Shutterstock
City residents started heading for the suburbs to work remotely when the pandemic hit, and they are continuing to do so. Many in this demographic are largely moving to suburbs close to cities—such as New Yorkers moving to New Jersey or Connecticut—leaving the option to return to the office part time. A suburb close to the city also offers access to urban amenities. Experts say demand will continue to grow for single-family suburban houses.
What would happen if you invested $100 a week in the stock market?
G-Stock Studio // Shutterstock
Government stimulus for coronavirus-related economic recovery is helping boost the real estate sector and real estate investment trusts. Funding helps tenants stay current with rent, allowing landlords to pay their mortgages, property taxes, and other expenses. Other government funding has gone directly to landlords and to small businesses, also benefiting real estate investments.
G-Stock Studio // Shutterstock
Government stimulus for coronavirus-related economic recovery is helping boost the real estate sector and real estate investment trusts. Funding helps tenants stay current with rent, allowing landlords to pay their mortgages, property taxes, and other expenses. Other government funding has gone directly to landlords and to small businesses, also benefiting real estate investments.
What would happen if you invested $100 a week in the stock market?
fizkes // Shutterstock
With housing prices rising, affordability has become a worsening crisis. Across the country, rents have gone up more than 7% in 2021, and they are expected to continue to rise. By definition, affordable housing means the property costs 30% or less of a household’s income. It’s estimated that nationwide, there is a shortage of some 6.8 million rental units for tenants with extremely low incomes.
fizkes // Shutterstock
With housing prices rising, affordability has become a worsening crisis. Across the country, rents have gone up more than 7% in 2021, and they are expected to continue to rise. By definition, affordable housing means the property costs 30% or less of a household’s income. It’s estimated that nationwide, there is a shortage of some 6.8 million rental units for tenants with extremely low incomes.
What would happen if you invested $100 a week in the stock market?
Konstantin L // Shutterstock
In Raleigh, one of the hottest real estate markets in the nation, houses listed for sale are on the market an average for a mere four days as of July 2021. Demand for housing is fueled in the area in part because a high number of buyers have good credit scores and are prepared with healthy down payments. In Austin, median home prices have been hitting record highs month after month. Housing prices are up some 42% from where they were a year ago, according to local realtors there.
Konstantin L // Shutterstock
In Raleigh, one of the hottest real estate markets in the nation, houses listed for sale are on the market an average for a mere four days as of July 2021. Demand for housing is fueled in the area in part because a high number of buyers have good credit scores and are prepared with healthy down payments. In Austin, median home prices have been hitting record highs month after month. Housing prices are up some 42% from where they were a year ago, according to local realtors there.
What would happen if you invested $100 a week in the stock market?
Andy Dean Photography // Shutterstock
Industrial and distribution properties are strong commercial real estate investments since e-commerce grew so dramatically amid the pandemic. With more e-commerce and less business at traditional brick-and-mortar stores, warehouse space is needed for goods. According to one estimate, 330 million square feet of warehouse space will be needed to house online orders by 2025. Additionally, companies doing sales online need distribution centers as they seek to improve their delivery systems.
Andy Dean Photography // Shutterstock
Industrial and distribution properties are strong commercial real estate investments since e-commerce grew so dramatically amid the pandemic. With more e-commerce and less business at traditional brick-and-mortar stores, warehouse space is needed for goods. According to one estimate, 330 million square feet of warehouse space will be needed to house online orders by 2025. Additionally, companies doing sales online need distribution centers as they seek to improve their delivery systems.
What would happen if you invested $100 a week in the stock market?
Andrey_Popov // Shutterstock
Along with fulfillment and warehouse properties being in demand, the single-family rental subsector is attracting investor interest. Having spent so much time at home during the pandemic, families are moving and seeking detached rentals with more space. Of the nation’s 46 million rental units, about a third are single-family. The build-to-rent market is growing as well, and about 12% of new construction of single-family homes this year has been in the area of rentals.
Andrey_Popov // Shutterstock
Along with fulfillment and warehouse properties being in demand, the single-family rental subsector is attracting investor interest. Having spent so much time at home during the pandemic, families are moving and seeking detached rentals with more space. Of the nation’s 46 million rental units, about a third are single-family. The build-to-rent market is growing as well, and about 12% of new construction of single-family homes this year has been in the area of rentals.
What would happen if you invested $100 a week in the stock market?
StacieStauffSmith Photos // Shutterstock
Vacation homes have become a popular investment as Americans are traveling again but are opting for more privacy and distancing than traditional hotels and motels provide. This summer, over the Independence Day holiday weekend, reservations for short-term vacation rentals were nearly 50% higher than they were in the pre-pandemic summer of 2019. For the rest of the 2021 summer, the outlook for such reservations is strong, up 80% over 2019 levels. Rates are higher overall: another plus for the vacation-home investor.
StacieStauffSmith Photos // Shutterstock
Vacation homes have become a popular investment as Americans are traveling again but are opting for more privacy and distancing than traditional hotels and motels provide. This summer, over the Independence Day holiday weekend, reservations for short-term vacation rentals were nearly 50% higher than they were in the pre-pandemic summer of 2019. For the rest of the 2021 summer, the outlook for such reservations is strong, up 80% over 2019 levels. Rates are higher overall: another plus for the vacation-home investor.
What would happen if you invested $100 a week in the stock market?
Stock Creative // Shutterstock
Housing starts are being held down in large part by the high cost of building materials and a labor shortage. The prices for steel, lumber, concrete, and other materials are high. Also, builders are seeing extensive delays in the delivery of goods like heating units and windows. Lumber prices could stay high due to wildfires this summer in the West, experts say.
This story originally appeared on RoofStock and was produced and distributed in partnership with Stacker Studio.
Stock Creative // Shutterstock
Housing starts are being held down in large part by the high cost of building materials and a labor shortage. The prices for steel, lumber, concrete, and other materials are high. Also, builders are seeing extensive delays in the delivery of goods like heating units and windows. Lumber prices could stay high due to wildfires this summer in the West, experts say.
This story originally appeared on RoofStock and was produced and distributed in partnership with Stacker Studio.
Most of us don’t have giant piles of cash sitting around, waiting to be invested. Instead, if we manage our incomes and expenses well, what we might be able to do is come up with a little bit every payday to put toward our longer-term futures.
Of course, with many retirement estimates projecting savings needs somewhere in the $1 million (or more) range, making small, regular investments may not seem like it’ll make that big a difference. Over time, though, those small investments certainly can add up, especially when compounding starts kicking in. Indeed, read on to find out what would happen if you had invested $100 a week in the stock market since the launch of the SPDR S&P 500 ETF (NYSEMKT: SPY) that tracks the S&P 500.
You can easily buy a great market proxy
The SPDR S&P 500 ETF was the first exchange-traded funds launched in the United States. Once it began trading in January 1993, ordinary people had a low-cost opportunity to buy or sell a market basket of 500 of America’s biggest and best-known companies, throughout the trading day. With low internal management costs and low churn, the SPDR S&P 500 ETF quickly became a great option for small investors looking to own a fairly diversified market-based portfolio.
The following chart shows what would have happened if you had bought $100 worth of that ETF every week since it launched and reinvested your dividends along the way.
$100 a week — about $5,200 a year — would have turned into over $841,000 over the past 28-plus years. When compared to approximately $149,000 invested over that same window, it’s very clear that a little bit, consistently invested over the long haul, can add up over time to a life-changing amount of money.
Of course, past performance is no guarantee of future results. Still, even if the market goes nowhere for decades, investing at lousy rates of return beats not investing at all. Indeed, the preceding chart shows us that there were times when the total value of the portfolio bounced right back to around the initial invested amount. Even with that reality, had you spent the money instead of invested it, you would have had nothing at all — and you wouldn’t have been able to participate in the market’s subsequent growth.
But the market is crazy high — won’t I lose money if I invest now?
With the market’s recent run-up, you might be nervous to start such a program now, out of fear that you’ll lose money if stocks fall. That’s a legitimate worry, especially if the Federal Reserve does actually taper its stimulus. That’s a key reason it’s important to remember that this strategy involves investing $100 every week — not all your money all at once.
By making regular investments, you’re making use of a strategy known as dollar-cost averaging. When you buy shares of a stock or a fund, you exchange your dollars for a certain number of shares at whatever the then current market price of those shares happens to be. If the stock’s or fund’s price falls, your investment may have a lower price tag on it, but you still own the same number of shares.
With your next investment, the new shares you buy add to the shares you already own. If the price happens to be lower when you make that purchase, you get more shares for your money. It’s through that mechanism of buying more shares at a lower price that dollar-cost averaging helps ease the pain of a falling market.
At the end of a falling market, you’ll have more shares from dollar-cost averaging your way in than had you gone “all in” near the market’s high. That gives you that much more “oomph” for any recovery that follows. On the flip side, should the market never drop, then you’ll still be better off having invested over time than not investing at all.
For those of us who can’t reliably predict what the market will do next, dollar-cost averaging is a tremendous tool that can help us invest in uncertain times and markets. As the preceding chart shows, it can also be an incredibly rewarding one as well.
Get started now
If there’s a downside to investing $100 per week in the market, it’s that it will take decades for that money to add up to a truly life-changing amount. So get started now, and begin building the foundation that can get you closer to your goal. They say that a journey of 1,000 miles starts with a single step. The sooner you take that step, the sooner you’ll have a chance of reaching the point where the money you’ve built up can have a meaningful impact on your life and the lives of those you love.
