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“Only buy something that you’d be perfectly happy to hold if the market shut down for 10 years.”

— 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 ten year holding period possibly?

Suppose a “buy-and-hold” investor was considering an investment into F5 Networks, Inc. (NASD: FFIV) back in 2009: back then, such an investor may have been pondering this very same question. Had they answered “yes” to a full ten year investment time horizon and then actually held for these past 10 years, here’s how that investment would have turned out.

Start date: 10/12/2009


End date: 10/10/2019
Start price/share: $41.68
End price/share: $132.45
Starting shares: 239.92
Ending shares: 239.92
Dividends reinvested/share: $0.00
Total return: 217.78%
Average annual return: 12.26%
Starting investment: $10,000.00
Ending investment: $31,787.06

As shown above, the ten year investment result worked out quite well, with an annualized rate of return of 12.26%. This would have turned a $10K investment made 10 years ago into $31,787.06 today (as of 10/10/2019). On a total return basis, that’s a result of 217.78% (something to think about: how might FFIV shares perform over the next 10 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]

Here’s one more great investment quote before you go:
“If you’re looking for a home run, a great investment for five years or 10 years or more, then the only way to beat this enormous fog that covers the future is to identify a long-term trend that will give a particular business some sort of edge.” — Ralph Wanger