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Here's How Much Investing $1,000 In Goldman Sachs At Great Recession Lows Would Be Worth Today

Wayne Duggan
·3 min read

Despite an extremely volatile, difficult and unpredictable 2020, the S&P 500 has managed to gain significant ground to new all-time highs in 2020. Investors who bought the dip during the sell-off early in the year have been rewarded with a fast market recovery.

Buying the dip was also a great move during the 2008 Great Recession, when the S&P 500 lost roughly 50% of its value, ultimately bottoming at 666.79 on March 9, 2009.

Since the bottom, the SPDR S&P 500 ETF Trust (NYSE: SPY) has generated a total return of 553% over the last 11-plus years.

Goldman Sachs’ Difficult Decade: One market laggard of the past decade was big bank Goldman Sachs Group Inc (NYSE: GS).

Goldman Sachs and other U.S. banks were at the epicenter of the financial crisis in 2008 and 2009. Prior to the collapse, Goldman Sachs was considered to be one of the strongest investment banks on Wall Street.

In fact, critics pointed to Goldman’s $4 billion in profit from short selling subprime mortgage-backed securities as the type of banking behavior that exacerbated an already difficult situation.

Yet Goldman was arguably far more a victim of the crisis than a predator. The big bank needed a $5-billion investment by Warren Buffett, a $5-billion public offering in September 2008 and eventually a $10-billion investment from the U.S. Treasury to make it through the worst of the crisis.

Related Link: Here's How Much Investing ,000 In Citigroup At Great Recession Lows Would Be Worth Today

Goldman Sachs started the 2010s trading at $173.08 after paying back the U.S. Treasury in full in June 2009. Like many other bank stocks, Goldman Sachs shares quickly hit their low point of the 2010s during the Eurozone debt crisis in 2011, dropping as low as $84.27.

Goldman Sachs shares recovered to as high as $218.77 in mid-2015 before dropping sharply due to a steep decline in trading revenue. Goldman Sachs surpassed its pre-crisis high of $250.70 in early 2018 and eventually made it to its all-time high of $275.31 a few weeks later.

The Goldman rally ran out of steam at that point, and the stock pulled back to as low as $151.70 by the end of the year due to the 1 Malaysia Development Berhad (1MDB) scandal. The U.S. Justice Department charged former Goldman executives for their alleged role in a scheme in which $4.5 billion was embezzled via money laundering, abuse of power and corruption on behalf of the former Malaysian prime minister and other politicians.

Goldman Sachs In 2020, Beyond: Goldman shares made it back up to $250.46 in early 2020 before the COVID-19 sell-off brought them back down to as low as $130.85.

Goldman is now back trading at around $207, and despite the bumpy road, Goldman Sachs investors who held on through a volatile decade ultimately turned a significant profit.

In fact, $1,000 worth of Morgan Stanley bought on the day the S&P 500 bottomed in 2009 would be worth about $3,295 today, assuming reinvested dividends.

Looking ahead, analysts expect additional upside for Goldman Sachs in the next 12 months. The average price target among the 24 analysts covering the stock is $252.50, suggesting 22% upside from current levels.

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