“Someone’s sitting in the shade today because someone planted a tree a long time ago.”
— Warren Buffett
One of the most important things investors can learn from Warren Buffett, is about how they approach their time horizon for an investment into a stock under consideration. Because immediately after buying shares of a given stock, investors will then be able to check on the day-to-day (and even minute-by-minute) market value. Some days the stock market will be up, other days down. These daily fluctuations can often distract from the long-term view. Today, we look at the result of a two-decade holding period for an investor who was considering Amazon.com Inc (NASD: AMZN) back in 1999, bought the stock, ignored the market’s ups and downs, and simply held through to today.
|Average annual return:||18.70%|
As shown above, the two-decade investment result worked out exceptionally well, with an annualized rate of return of 18.70%. This would have turned a $10K investment made 20 years ago into $308,908.80 today (as of 05/23/2019). On a total return basis, that’s a result of 2,990.18% (something to think about: how might AMZN shares perform over the next 20 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
Another great investment quote to think about:
“The whole secret to winning big in the stock market is not to be right all the time, but to lose the least amount possible when you’re wrong.” — William O’Neil