“Only buy something that you’d be perfectly happy to hold if the market shut down for 10 years.”
— 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 decade-long period?
Today, let’s look backwards in time to 2009, and take a look at what happened to investors who asked that very question about CBRE Group Inc (NYSE: CBRE), by taking a look at the investment outcome over a decade-long holding period.
| Start date: | 12/07/2009 |
|
|||
| End date: | 12/04/2019 | ||||
| Start price/share: | $12.13 | ||||
| End price/share: | $57.03 | ||||
| Starting shares: | 824.40 | ||||
| Ending shares: | 824.40 | ||||
| Dividends reinvested/share: | $0.00 | ||||
| Total return: | 370.16% | ||||
| Average annual return: | 16.75% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $47,031.04 | ||||
As shown above, the decade-long investment result worked out exceptionally well, with an annualized rate of return of 16.75%. This would have turned a $10K investment made 10 years ago into $47,031.04 today (as of 12/04/2019). On a total return basis, that’s a result of 370.16% (something to think about: how might CBRE 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:
“The policy of being too cautious is the greatest risk of all.” — Jawaharlal Nehru
