The COVID stock market crash of 2020 is starting to feel like a long time ago. With the S&P/ASX 200 Index (ASX: XJO) at around 7,270 points today, we are certainly a long way off from those dark days in early 2020 which saw the ASX 200 get down to around 4,800 points – around 50% as it turns out.
The impacts of this terrifying stock market crash can still be felt on the ASX today. Many investors were selling out of their shares back then, driven by the panic over what turned into the pandemic.
But for every seller, there has to be a buyer. So let's talk about Commonwealth Bank of Australia (ASX: CBA) shares and what they've been up to over the past three and a half years.
How much would an ASX investor have made buying CBA shares at COVID lows?
Let's assume that a lucky buyer was able to spend $3,000 on CBA shares back in the worst throes of the 2020 COVID crash.
Back then, the CBA share price got to its lowest pit of the year on 23 March 2020. On that day, this ASX 200 bank share minted a new 52-week low of $53.44. That share price was the lowest CBA had traded at since 2012:
If our investor ploughed $3,000 into CBA shares at that exact share price, they would have secured themselves a parcel of 56 CBA shares, with a little change left over.
Today, these same CBA shares are trading at $102.85 each (at the time of writing). That means our 56 shares would have a value of $5,759.60. Turning $3,000 into $5,759.60 translates into a gain of 92%.
Not bad for three and a half years of waiting.
But CBA shares have also paid out quite a few dividends since March 2020. In fact, the bank has forked out six dividend payments since March 2020, totalling $10.43 per share.
Those dividends add another 10% in yield to our total returns, going off today's share price. But for our investor who bought in at $53.44, these dividends would have a yield-on-cost of 19.52%. That propels their total shareholder return to an impressive 111.5%.
As such, including dividends, our investor would have turned $3,000 into $6,343.68. What better way of proving that Warren Buffett's wisdom of 'being greedy when others are fearful' can work wonders.
