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

— Warren Buffett

This inspiring quote from Warren Buffett teaches us the importance of considering our investment time horizon when approaching any given investment: Could we envision ourselves holding the stock we are considering for many years? Even a two-decade holding period potentially?

For “buy-and-hold” investors taking a long-term view, what’s important isn’t the short-term stock market fluctuations that will inevitably occur, but what happens over the long haul. Looking back 20 years to 1999, investors considering an investment into shares of Martin Marietta Materials, Inc. (NYSE: MLM) may have been pondering this very question and thinking about their potential investment result over a full two-decade time horizon. Here’s how that would have worked out.

Start date: 10/14/1999


End date: 10/11/2019
Start price/share: $40.12
End price/share: $265.43
Starting shares: 249.22
Ending shares: 329.95
Dividends reinvested/share: $25.77
Total return: 775.79%
Average annual return: 11.46%
Starting investment: $10,000.00
Ending investment: $87,627.21

As we can see, the two-decade investment result worked out quite well, with an annualized rate of return of 11.46%. This would have turned a $10K investment made 20 years ago into $87,627.21 today (as of 10/11/2019). On a total return basis, that’s a result of 775.79% (something to think about: how might MLM shares perform over the next 20 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]

Beyond share price change, another component of MLM’s total return these past 20 years has been the payment by Martin Marietta Materials, Inc. of $25.77/share in dividends to shareholders. Automatic reinvestment of dividends can be a wonderful way to compound returns, and for the above calculations we presume that dividends are reinvested into additional shares of stock. (For the purpose of these calcuations, the closing price on ex-date is used).

Here’s one more great investment quote before you go:
“One of the funny things about the stock market is that every time one person buys, another sells, and both think they are astute.” — William Feather