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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 wisdom of Warren Buffett reflects a value-based philosophy about investing that says investors are buying shares in a business, and encourages strategic thinking about investment time horizon. Before placing a buy order for a stock, a great question we can ask is whether we would still be comfortable making the investment if we couldn’t sell it for many years?

A “buy-and-hold” approach may call for a time horizon that spans a long period of time — maybe even lasting for a ten year holding period. Suppose such a “buy-and-hold” investor had looked into buying shares of Hologic Inc (NASD: HOLX) back in 2009. Let’s take a look at how such an investment would have worked out for that buy-and-hold investor:

Start date: 07/13/2009


End date: 07/10/2019
Start price/share: $13.06
End price/share: $47.82
Starting shares: 765.70
Ending shares: 765.70
Dividends reinvested/share: $0.00
Total return: 266.16%
Average annual return: 13.86%
Starting investment: $10,000.00
Ending investment: $36,606.43

As we can see, the ten year investment result worked out quite well, with an annualized rate of return of 13.86%. This would have turned a $10K investment made 10 years ago into $36,606.43 today (as of 07/10/2019). On a total return basis, that’s a result of 266.16% (something to think about: how might HOLX 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:
“Know what you own and why you own it.” — Peter Lynch