If you’ve been considering an investment in the electric vehicle manufacturer Rivian (NASDAQ: RIVN) for the last three years but haven’t yet taken the plunge, you’re probably wondering how it would have turned out if you had.

Let’s find out!

Three years ago, around mid-December 2021, Rivian shares were priced at approximately $115 each. If you had invested $1,000 at that time, you would have acquired nearly nine shares of the company. (Many brokers now allow you to purchase fractional shares, which can be very beneficial.)

Now, let’s look at how that investment would have fared. Presently, Rivian’s stock has dropped by about 87% over the past three years, which means your $1,000 investment would now be worth… around $125. That’s quite a loss.

What are the factors affecting Rivian? The company, known for its electric pickup trucks, has encountered several obstacles. One major issue is that Rivian currently offers only two models, both of which are priced near $100,000, making them unaffordable for many potential buyers. Additionally, the company has not yet turned a profit, which is less than encouraging for investors.

If you had opted instead to invest that $1,000 in a low-fee S&P 500 index fund, you would have seen a gain of roughly 33%, increasing your investment to $1,326. This reflects an average annual return of nearly 10%.

Data source: Author’s calculations.

Clearly, there are effective ways to grow your wealth without relying on volatile stocks. If you are considering investments like Rivian, it’s wise to diversify your portfolio and not concentrate too heavily on high-risk options.

Selena Maranjian does not hold shares in any of the stocks mentioned. The Motley Fool holds no positions in any of the stocks mentioned. Please refer to their disclosure policy.

The Motley Fool is a YSL News content partner providing financial insights, analyses, and opinions aimed at empowering individuals in managing their financial matters. The content is independently produced.

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