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“When we own portions of outstanding businesses with outstanding managements, our favorite holding period is forever.”

— Warren Buffett

The Warren Buffett investment philosophy calls for a long-term investment horizon, where a two-decade holding period, or even longer, would fit right into the strategy. How would such a strategy have worked out for an investment into Cadence Design Systems Inc (NASD: CDNS)? Today, we examine the outcome of a two-decade investment into the stock back in 1999.

Start date: 06/03/1999
$10,000

06/03/1999
$48,208

05/31/2019
End date: 05/31/2019
Start price/share: $13.19
End price/share: $63.57
Starting shares: 758.29
Ending shares: 758.29
Dividends reinvested/share: $0.00
Total return: 382.05%
Average annual return: 8.18%
Starting investment: $10,000.00
Ending investment: $48,208.84

As shown above, the two-decade investment result worked out well, with an annualized rate of return of 8.18%. This would have turned a $10K investment made 20 years ago into $48,208.84 today (as of 05/31/2019). On a total return basis, that’s a result of 382.05% (something to think about: how might CDNS shares perform over the next 20 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]

Here’s one more great investment quote before you go:
“Unless you can watch your stock holding decline by 50% without becoming panic-stricken, you should not be in the stock market.” — Warren Buffett