Lithium shares are easily among the hottest stocks of the S&P/ASX All Ordinaries Index (ASX: XAO) in 2022.
In this article, we do the maths to discover what $10,000 invested in five of the most popular lithium shares a year ago would be worth today.
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How much have these shares gone up in 12 months?
Let's say you invested $2,000 in each of the following five ASX lithium shares a year ago.
Now, let's see where these stocks are trading today and how far they've moved up in that time.
- The Core Lithium Ltd (ASX: CXO) share price is $1.42, up 158% over the past 12 months
- The Mineral Resources Limited (ASX: MIN) share price is $86.70, up 98% over the past 12 months
- The Pilbara Minerals Ltd (ASX: PLS) share price is $4.85, up 92% over the past 12 months
- The IGO Ltd (ASX: IGO) share price is $16, up 56% over the past 12 months
- The Allkem Ltd (ASX: AKE) share price is $14.59, up 50% over the past 12 months.
You'll note that Mineral Resources is included in this list. Yes, while it does mine more than lithium, it is a global top-five producer and therefore worthy of inclusion in any list of lithium shares.
What is my $10,000 worth now?
So, drum roll please… in total, your initial $10,000 investment would be worth about $19,080 today (excluding the minor impact of brokerage fees).
This list above demonstrates the power of investing in ASX shares with momentum.
By comparison, All Ords shares as a group are down 3.6% over the past 12 months.
Why have ASX lithium shares gone up so much?
Lithium stocks have got momentum for three reasons:
- They are a direct beneficiary of a brand new and rapidly-rising global industry: electric vehicles (EVs)
- The commodity price of lithium has reached historical levels and is up 200% year over year, according to Trading Economics data
- Lithium shares are associated with a massive long-term global investment thematic: decarbonisation.
It's important to remember that past performance doesn't guarantee future returns. Things can change.
For example, some experts think the amount of business investment going into new lithium mines will lead to an oversupply of the resource. That might mean weaker commodity prices and, thus, share prices. (Many disagree with that assessment, it's worth noting.)
We also do not suggest that if you have $10,000 to invest, you put it all into ASX lithium shares. Or for that matter, any other stocks that happen to have momentum at the moment. That goes against one of The Fool's fundamental beliefs that share portfolios should always have diversification.
But if you do have $10,000 to invest, check out our article on how to start investing with $10,000.
