Ford Motor Company (F 0.66%) has had a terrific year. As of Oct. 9, the share price has increased by 17%. This gain has outperformed the S&P 500 index. Investors have started to view the business more positively. However, it's also important to pay attention to long-term trends.
If you bought $1,000 worth of this Detroit auto stock 10 years ago, how much would you have today?
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Ford shares are driving at a slow pace
Ford might be outpacing the broader market in 2025, but this is a new phenomenon. In the past decade, its shares have produced a total return of 35%. A $1,000 investment in Ford 10 years ago would be worth just $1,350 today.
Investors would've been much better off buying an S&P 500 index fund. The popular benchmark generated a total return of 300% during the same stretch.
Is Ford a smart long-term investment?
Ford has momentum on its side this year. And the stock is cheap, trading at a forward price-to-earnings ratio of 9.
However, there are valid reasons this isn't a smart long-term investment, particularly for those who want to outperform the market and score huge returns. This is a low-growth, capital-intensive business that collects low profits. And demand for autos is highly cyclical. These aren't the ingredients for a winning stock.
