“Only buy something that you’d be perfectly happy to hold if the market shut down for 10 years.”
— Warren Buffett
One of the most important things investors can learn from Warren Buffett, is about how they approach their time horizon for an investment into a stock under consideration. Because immediately after buying shares of a given stock, investors will then be able to check on the day-to-day (and even minute-by-minute) market value. Some days the stock market will be up, other days down. These daily fluctuations can often distract from the long-term view. Today, we look at the result of a ten year holding period for an investor who was considering Intuitive Surgical Inc (NASD: ISRG) back in 2009, bought the stock, ignored the market’s ups and downs, and simply held through to today.
| Start date: | 09/08/2009 |
|
|||
| End date: | 09/05/2019 | ||||
| Start price/share: | $76.81 | ||||
| End price/share: | $508.17 | ||||
| Starting shares: | 130.19 | ||||
| Ending shares: | 130.19 | ||||
| Dividends reinvested/share: | $0.00 | ||||
| Total return: | 561.59% | ||||
| Average annual return: | 20.80% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $66,137.00 | ||||
As we can see, the ten year investment result worked out exceptionally well, with an annualized rate of return of 20.80%. This would have turned a $10K investment made 10 years ago into $66,137.00 today (as of 09/05/2019). On a total return basis, that’s a result of 561.59% (something to think about: how might ISRG shares perform over the next 10 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
One more piece of investment wisdom to leave you with:
“The right time for a company to finance its growth is not when it needs capital, but rather when the market is most receptive to providing capital.” — Michael Milken
