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“Someone’s sitting in the shade today because someone planted a tree a long time ago.”

— 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 twenty year period?

Today, let’s look backwards in time to 1999, and take a look at what happened to investors who asked that very question about Advanced Micro Devices Inc (NASD: AMD), by taking a look at the investment outcome over a twenty year holding period.

Start date: 09/09/1999
$10,000

09/09/1999
$27,465

09/06/2019
End date: 09/06/2019
Start price/share: $11.13
End price/share: $30.56
Starting shares: 898.47
Ending shares: 898.47
Dividends reinvested/share: $0.00
Total return: 174.57%
Average annual return: 5.18%
Starting investment: $10,000.00
Ending investment: $27,465.25

The above analysis shows the twenty year investment result worked out well, with an annualized rate of return of 5.18%. This would have turned a $10K investment made 20 years ago into $27,465.25 today (as of 09/06/2019). On a total return basis, that’s a result of 174.57% (something to think about: how might AMD shares perform over the next 20 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]

Here’s one more great investment quote before you go:
“Cash is a fact, profit is an opinion.” — Alfred Rappaport