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

— Warren Buffett

Investors can learn a lot from Warren Buffett, whose above quote teaches the importance of thinking about investment time horizon, and asking ourselves before buying any given stock: can we envision holding onto it for years — even a two-decade holding period possibly?

Suppose a “buy-and-hold” investor was considering an investment into F5 Networks, Inc. (NASD: FFIV) back in 1999: back then, such an investor may have been pondering this very same question. Had they answered “yes” to a full two-decade investment time horizon and then actually held for these past 20 years, here’s how that investment would have turned out.

Start date: 09/13/1999


End date: 09/11/2019
Start price/share: $36.63
End price/share: $142.32
Starting shares: 273.00
Ending shares: 273.00
Dividends reinvested/share: $0.00
Total return: 288.53%
Average annual return: 7.02%
Starting investment: $10,000.00
Ending investment: $38,863.43

The above analysis shows the two-decade investment result worked out well, with an annualized rate of return of 7.02%. This would have turned a $10K investment made 20 years ago into $38,863.43 today (as of 09/11/2019). On a total return basis, that’s a result of 288.53% (something to think about: how might FFIV shares perform over the next 20 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]

More investment wisdom to ponder:
“October is one of the peculiarly dangerous months to speculate in stocks. The others are July, January, September, April, November, May, March, June, December, August and February.” — Mark Twain