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“Only buy something that you’d be perfectly happy to hold if the market shut down for 10 years.”

— Warren Buffett

The above quote from Warren Buffett is timeless, and brings into focus the choice about time horizon that any investor should think about before buying a stock they are considering. Behind every stock is an actual business; what will that business look like over a decade-long period?

Today, let’s look backwards in time to 2009, and take a look at what happened to investors who asked that very question about Alexion Pharmaceuticals Inc. (NASD: ALXN), by taking a look at the investment outcome over a decade-long holding period.

Start date: 05/13/2009


End date: 05/10/2019
Start price/share: $16.83
End price/share: $131.69
Starting shares: 594.18
Ending shares: 594.18
Dividends reinvested/share: $0.00
Total return: 682.47%
Average annual return: 22.85%
Starting investment: $10,000.00
Ending investment: $78,254.04

As we can see, the decade-long investment result worked out exceptionally well, with an annualized rate of return of 22.85%. This would have turned a $10K investment made 10 years ago into $78,254.04 today (as of 05/10/2019). On a total return basis, that’s a result of 682.47% (something to think about: how might ALXN shares perform over the next 10 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]

Another great investment quote to think about:
“If you are not willing to own a stock for 10 years, do not even think about owning it for 10 minutes.” — Warren Buffett