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Tesla (TSLA) has been one of the most volatile stocks on the market recently.
From its December high of around $480, shares have dipped to less than $250 per share at time of writing, at times going as low as $221. In that time TSLA has swung significantly, gaining and losing up to 30% of its value within weeks. These fluctuations have made a lot of investors nervous about the high-profile company and its even higher-profile owner Elon Musk.
But, Tesla’s stock is historically volatile. In 2021, for example, the company’s stock swung from around $290 per share to around $199 in a period of just eight weeks, from early January to early March. Six months later, by early November, the stock was selling for $407.
This was a 30% loss of value, followed by a 100% gain of value within less than a year.
So, while there is reason to be skeptical, investors bullish on Tesla also have a strong argument to make. They’ve been here before, and historically have done quite well on buying the dips of TSLA shares. Here are three examples of what someone could have earned by investing $10,000 in Tesla at three different dips.
Consider speaking with a financial advisor for help planning and executing your own investment strategy.
First Example: 2020 to 2021
Decline: From $60 to $24
Recovery: From $24 to $293
All equities have a degree of volatility. This is arguably their key feature in a portfolio. So, any individual stock holding will have its ups and downs.
Day-to-day volatility is different from a true dip, which is characterized by a significant loss of prices after a period of sustained gains. One major example began in February, 2020 and lasted until March, 2020. The company’s stock was dragged down with the rest of the market during the Covid-induced stock market crash, dropping from around $60 per share in February to a low of around $24.
Also along with the rest of the market, Tesla’s stock bounced back quickly. The company recovered to its original value by early June. It hit a next high of $293 by January 8 of the following year, less than 11 months after the dip started. If you had invested $10,000 at the bottom of this dip, you would have had $121,888 by the top of the recovery. ($10,000 / 24 = 416 shares * $293 = $121,888)
Second Dip: 2021
Decline: From $293 to $187
Recovery: From $187 to $407
Tesla swung another major dip in early 2021.
After its 2020 recovery, Tesla’s stock lost about one-third of its value beginning in early 2021. This was shortly before the significant inflation of 2021/2022 and the subsequent interest rate hikes, so those hadn’t taken effect yet. As a result, there wasn’t much systematic reason for the company’s price to fall.
This dip took effect at the very beginning of the year, with share prices dropping from $293 in early January to $187 by early March. This was likely too early for 2021s sales to significantly impact the company’s stock price.
The recovery soon followed. By November of that year, Tesla’s share price had jumped back up to $407. If you had invested $10,000 at the bottom of this dip, you would have had $21,571. ($10,000 / $187 = 53 shares * $407 = $21,571).
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Third Dip: Late 2021 to Late 2024
Decline: From $407 to $109
Recovery: From $109 to $479
A third significant dip for Tesla’s price occurred from November, 2021 through January 2023, when prices hit a low of around $110. Tesla’s stock suffered an extremely volatile year in 2022. In part, this was market-wide. High inflation and the resulting high interest rates both dragged on share prices across the board. The result was a slide of almost $300, 75% of the stock’s starting value. The climb back was not a smooth one.
Arguably, Tesla had another significant dip in mid-2024, when the company’s stock price slipped back down to around $140 per share in April. However, ultimately, Tesla’s stock rebounded to a recent high of around $479 in December, 2024. If you had invested $10,000 at the bottom of this three-year timeframe and sold at the local top, you would have had about $43,944. ($10,000 / $109 = 91 Shares * $479 = $43,944).
You can use this free tool to match with a financial advisor if you’re interested in exploring your investment options.
The Bottom Line
Like much of the market, Tesla has had a volatile period over the past five years. Yet, the stock has bounced back significantly after each dip, and investors who bought in at the bottom would have made quite a lot.
Tips On Speculating In Your Portfolio
- Buying the dip, or “timing the market,” can be very profitable… when it works. While market timing is a very bad fit for most of your portfolio, it can be a good way to speculate with the high-risk section of your money. But before you make the first purchase, make sure you understand the difference between investment and speculation.
- A financial advisor can help you build a comprehensive retirement plan. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
- Are you a financial advisor looking to grow your business? SmartAsset AMP helps advisors connect with leads and offers marketing automation solutions so you can spend more time making conversions. Learn more about SmartAsset AMP.
- Keep an emergency fund on hand in case you run into unexpected expenses. An emergency fund should be liquid — in an account that isn’t at risk of significant fluctuation like the stock market. The tradeoff is that the value of liquid cash can be eroded by inflation. But a high-interest account allows you to earn compound interest. Compare savings accounts from these banks.
This is not an offer to buy or sell any security or interest. All investing involves risk, including loss of principal. This article IS FOR INFORMATIONAL PURPOSES ONLY AND IS NOT INTENDED TO PROVIDE LEGAL ADVICE, TAX ADVICE, ACCOUNTING ADVICE OR FINANCIAL ADVICE. Before making any final decisions or implementing any financial strategy, you should consider obtaining additional information and advice from your accountant or other financial advisers who are fully aware of your individual circumstances. SmartAsset’s services are limited to referring users to third party advisers registered or chartered as fiduciaries (“Adviser(s)”) with a regulatory body in the United States that have elected to participate in our matching platform based on information gathered from users through our online questionnaire. We do not manage client funds or hold custody of assets, we help users connect with relevant financial advisors.
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