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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 twenty year holding period possibly?

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

Start date: 10/15/1999


End date: 10/14/2019
Start price/share: $0.88
End price/share: $48.50
Starting shares: 11,363.64
Ending shares: 11,363.64
Dividends reinvested/share: $0.00
Total return: 5,411.36%
Average annual return: 22.18%
Starting investment: $10,000.00
Ending investment: $550,751.69

The above analysis shows the twenty year investment result worked out exceptionally well, with an annualized rate of return of 22.18%. This would have turned a $10K investment made 20 years ago into $550,751.69 today (as of 10/14/2019). On a total return basis, that’s a result of 5,411.36% (something to think about: how might HOLX shares perform over the next 20 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]

Another great investment quote to think about:
“You get recessions, you have stock market declines. If you don’t understand that’s going to happen, then you’re not ready, you won’t do well in the markets.” — Peter Lynch