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

— Warren Buffett

The Warren Buffett investment philosophy calls for a long-term investment horizon, where a twenty year holding period, or even longer, would fit right into the strategy. How would such a strategy have worked out for an investment into Electronic Arts, Inc. (NASD: EA)? Today, we examine the outcome of a twenty year investment into the stock back in 1999.

Start date: 12/23/1999
$10,000

12/23/1999
$12,720

12/20/2019
End date: 12/20/2019
Start price/share: $84.81
End price/share: $107.95
Starting shares: 117.91
Ending shares: 117.91
Dividends reinvested/share: $0.00
Total return: 27.28%
Average annual return: 1.21%
Starting investment: $10,000.00
Ending investment: $12,720.29

The above analysis shows the twenty year investment result worked out as follows, with an annualized rate of return of 1.21%. This would have turned a $10K investment made 20 years ago into $12,720.29 today (as of 12/20/2019). On a total return basis, that’s a result of 27.28% (something to think about: how might EA shares perform over the next 20 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]

One more investment quote to leave you with:
“If you’re prepared to invest in a company, then you ought to be able to explain why in simple language that a fifth grader could understand, and quickly enough so the fifth grader won’t get bored.” — Peter Lynch