I put $2,000 in BHP during the pandemic, see how much it's worth now!

Amidst the pandemic's tumultuous waves, BHP Group Ltd ASX BHP stands out for its unwavering commitment to shareholders, evident in the consistent payout of two annual dividends. In this journey, we explore the financial odyssey of a hypothetical $2,000 investment in BHP shares at the onset of the pandemic.

The Market Retrace: BHP Amidst Pandemic Challenges

In the midst of a broader market retrace, BHP shares are currently experiencing a slight dip, trading at $49.30. However, despite this temporary setback, the shares have displayed remarkable resilience, showcasing a substantial increase in their year-to-date performance since the early days of the pandemic.

The Headline Question: Pandemic Investment Reflections

The key question emerges: What would a $2,000 investment in BHP shares at the pandemic's outset look like today? To answer this inquiry, we delve into the market dynamics and the wisdom of seizing opportunities amidst fear, as exemplified by Warren Buffett. Analyzing BHP's pandemic journey involves exploring the potential gains and losses, considering the market's unpredictable nature during challenging times.

Taking the Plunge: BHP Amid Market Fear

The pandemic-induced market crash was marked by a heavy sell-off of stocks, a scenario in which BHP shares were not immune. This unprecedented market turmoil prompted a reevaluation of investment strategies. Simultaneously, BHP, highly reliant on commodities, faced significant turmoil as well. In mid-March 2020, both iron ore and copper, essential revenue drivers for the mining giant, experienced lows, adding to the complexities of navigating the crisis.

Iron Ore and Copper: From Lows to Highs

In mid-March 2020, commodities faced a crisis with iron ore plummeting to $86 per tonne and copper dropping to $4,810 per tonne, creating a challenging scenario for BHP. However, the tide has turned since then, with today's valuations showcasing a remarkable recovery. Currently, iron ore commands $134 per tonne, and copper trades at $8,549 per tonne. This significant rebound signifies not only a revival in commodity prices but also underscores the resilience of BHP's revenue drivers in overcoming the earlier challenges.

BHP Shares' Rollercoaster: Seizing Opportunities

On March 13, 2020, BHP shares, down 34% to $26.72 apiece, presented a lucrative buying opportunity. Reflecting on Warren Buffett's advice to be greedy when others are fearful, the potential gains from a hypothetical $2,000 investment during that period underscore the wisdom of seizing opportunities amid market uncertainty.

Returns on the Investment: A Financial Odyssey

As of the present, BHP shares are valued at $49.30 each, indicating a substantial gain since the early days of the pandemic. Calculating the gains from a $2,000 investment reveals an impressive outcome, with the investment potentially growing to $3,648.20—a noteworthy increase of $1,648.20. This success story emphasizes the potential for significant returns on investment during volatile market conditions.

The Dividend Delight: BHP's Unwavering Payouts

BHP shares appeal to passive income investors with reliable dividends, providing stability even amid the pandemic. This commitment to two annual dividends enhances the attractiveness of BHP shares as a consistent source of income.

Counting the Dividends: A Bonus for Investors

An investor purchasing BHP stock on March 13, 2020, would have received seven fully franked dividends, illustrating the consistent payout pattern. Opting not to reinvest these dividends would have resulted in an additional $12.03 per share, accumulating to a total of $899.22 for 74 shares. This highlights the potential financial impact of dividends on the investment, adding a substantial income component to the overall returns.

The Bottom Line: Accumulated Value and Insights

The total value of the initial investment, factoring in both share value and dividends, would reach an impressive $4,538.42. This success story not only underscores the financial gains but also validates the timeless wisdom of Warren Buffett. The emphasis on strategic investing during market uncertainties, as exemplified by Buffett, proves its merit in achieving substantial returns and navigating challenges effectively.

Conclusion

In conclusion, BHP's resilience, combined with consistent dividends, paints a compelling picture of long-term gains despite pandemic challenges. The journey of a $2,000 investment showcases the potential for robust returns.