“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 Vertex Pharmaceuticals, Inc. (NASD: VRTX), by taking a look at the investment outcome over a decade-long holding period.
| Start date: | 07/13/2009 |
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| End date: | 07/10/2019 | ||||
| Start price/share: | $32.99 | ||||
| End price/share: | $178.76 | ||||
| Starting shares: | 303.12 | ||||
| Ending shares: | 303.12 | ||||
| Dividends reinvested/share: | $0.00 | ||||
| Total return: | 441.86% | ||||
| Average annual return: | 18.42% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $54,206.25 | ||||
As shown above, the decade-long investment result worked out exceptionally well, with an annualized rate of return of 18.42%. This would have turned a $10K investment made 10 years ago into $54,206.25 today (as of 07/10/2019). On a total return basis, that’s a result of 441.86% (something to think about: how might VRTX shares perform over the next 10 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
One more investment quote to leave you with:
“If I’ve learned one thing in this life it’s this: even if you lose, don’t lose the lesson.” — Daymond John
