Ive been looking at the total returns made by some of our top FTSE 100 companies recently, and it was quite a shock to see the 65% loss that a Lloyds Banking Group investment would have made with all dividends reinvested.
That made me wonder how the other banks, the ones that didnt need a taxpayer bailout, would have fared, so Ive been doing the sums for Barclays (LSE: BARC) (NYSE: BCS.US), too. Although there was no bailout, Barclays has suffered a number of penalties due to past misdeeds and there are fears there may be more to come and that will be depressing the price today.
A 54% slump!
If youd bought Barclays shares at the end of September 2013, youd have had to pay 490p apiece for them. And a couple of years later, with the price hovering around 620p, youd probably have been feeling pretty pleased with yourself especially as youd have had a couple of years of 5% dividend yields lining your pockets too.
But that would have been the end of the happy days, and by 2011 your shares would have crashed to under 140p and dividends would have been slashed.
The price has recovered since then to 226p as I write, but thats still a loss of 54% over 10 years 10,000 invested in 2004 would be worth only 4,612 now.
The dividend situation at Barclays turned pretty desperate, but you would still have had some cash to help counter your capital loss a little 3,047, in fact, and that would lift your final pot to 7,659.
Youd still have been down 23%, but thats much better than that 54% capital loss alone.
What if youd done what most people would think wise and reinvested your dividends each year instead of spending the cash? Well, with the share price having slumped so much youd have bought most of your new shares at prices higher than today. The recent mini-recovery would have helped offset the damage, but youd have lost 874 of your dividend cash.
Youd be left with 6,785 for an overall loss of 32% nasty, but if you never suffer a worse single-share catastrophe in your investing career, you really wont have done too badly.
As part of a diversified portfolio held with a long-term view, you really wouldnt have been too badly hurt by Barclays as long as you werent holding Lloyds and Royal Bank of Scotland, too!
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Alan Oscroft has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. We Fools don’t all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.