$10k In MU Proves ‘Buy And Hold’ Is Alive And Well

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— Warren Buffett

A key lesson we can learn from Warren Buffett, is about how to think about a potential stock investment in the context of a long-term time horizon. Every investor in a stock has a choice: bite our fingernails over the short-term ups and downs that are inevitable with the stock market, or, zero in on stocks we are comfortable to simply buy and hold for the long haul — maybe even a ten year holding period. Heck, investors can even choose to completely ignore the stock market’s short-run quotations and instead go into their initial investment planning to hold on for years and years regardless of the fluctuations in price that might occur next.

Today, we examine what would have happened over a ten year holding period, had you decided back in 2009 to buy shares of Micron Technology Inc. (NASD: MU) and simply hold through to today.

MU 10-Year Return Details
Start date:	09/04/2009	$10,000 09/04/2009 $61,229 09/03/2019
End date:	09/03/2019
Start price/share:	$7.35
End price/share:	$44.99
Starting shares:	1,360.54
Ending shares:	1,360.54
Dividends reinvested/share:	$0.00
Total return:	512.11%
Average annual return:	19.86%
Starting investment:	$10,000.00
Ending investment:	$61,229.16

As we can see, the ten year investment result worked out exceptionally well, with an annualized rate of return of 19.86%. This would have turned a $10K investment made 10 years ago into $61,229.16 today (as of 09/03/2019). On a total return basis, that’s a result of 512.11% (something to think about: how might MU shares perform over the next 10 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]

More investment wisdom to ponder:
“Investors should always keep in mind that the most important metric is not the returns achieved but the returns weighed against the risks incurred. Ultimately, nothing should be more important to investors than the ability to sleep soundly at night.” — Seth Klarman