Photo credit: commons.wikimedia.org

“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 Monster Beverage Corp (NASD: MNST) back in 2009, bought the stock, ignored the market’s ups and downs, and simply held through to today.

Start date: 11/05/2009
$10,000

11/05/2009
$91,049

11/04/2019
End date: 11/04/2019
Start price/share: $6.16
End price/share: $56.09
Starting shares: 1,623.38
Ending shares: 1,623.38
Dividends reinvested/share: $0.00
Total return: 810.55%
Average annual return: 24.71%
Starting investment: $10,000.00
Ending investment: $91,049.07

As we can see, the ten year investment result worked out exceptionally well, with an annualized rate of return of 24.71%. This would have turned a $10K investment made 10 years ago into $91,049.07 today (as of 11/04/2019). On a total return basis, that’s a result of 810.55% (something to think about: how might MNST 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:
“Investing is the intersection of economics and psychology.” — Seth Klarman