What if you bought Charles Schwab in 2000?
US Finance · Broker. The hindsight answer, year by year, against the only benchmark that matters.
Could you have picked it? Play2.5× · S&P 500 same money: $4,626
$1,000 in Charles Schwab at the start of 2000 would be worth about $2,500 today. A plain S&P 500 index fund over the same years would have made more — the boring option won.
The story
Charles Schwab pioneered discount brokerage after fixed commissions were abolished in 1975, and in the late 1990s it became an online trading darling. By 2000 day traders were piling in and the stock carried a lofty valuation; when the bubble burst, trading volumes collapsed and the shares lost most of their value. Chuck Schwab himself returned as chief executive in 2004 to cut costs and refocus the firm.
Schwab's real business model is less about trading fees than about client cash: it earns the spread between what it pays on deposits and what it earns by investing them. That is why near-zero interest rates after 2008 kept the stock depressed for years, and why it could cut trading commissions to zero in 2019 and then buy TD Ameritrade in 2020. In 2023, after rapid rate rises, Schwab faced unrealized losses on its bond portfolio and clients moving cash to higher-yielding funds, causing a sharp stock drop. It recovered as the bank-run fears faded and rates stabilized.
The lesson: Knowing how a company actually makes money matters; a broker can be mainly a bet on interest rates, not on trading activity.
$1,000 invested at the start of each year
| Bought in | Price then | Worth today | S&P 500 would be | Multiple |
|---|---|---|---|---|
| 2000 | $38.00 | $2,500 | $4,626 | 2.5× |
| 2003 | $11.00 | $8,636 | $7,727 | 8.6× |
| 2005 | $12.00 | $7,917 | $5,763 | 7.9× |
| 2007 | $19.00 | $5,000 | $4,789 | 5.0× |
| 2008 | $25.00 | $3,800 | $4,626 | 3.8× |
| 2010 | $19.00 | $5,000 | $6,071 | 5.0× |
| 2012 | $11.00 | $8,636 | $5,312 | 8.6× |
| 2015 | $30.00 | $3,167 | $3,301 | 3.2× |
| 2018 | $52.00 | $1,827 | $2,519 | 1.8× |
| 2020 | $48.00 | $1,979 | $2,092 | 2.0× |
green = beat the S&P 500 · red = lost money
Best entry point in our set: 2003, turning $1,000 into $8,636. The S&P 500 from that same year: $7,727.
On this day
Now try it without hindsight. The wheel decides the year and the asset class, you pick the position, ten seconds a pick, and we simulate to today. Charles Schwab is one of 258 positions on the wheel — including the ones that went to zero.
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