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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 decade-long holding period possibly?

Suppose a “buy-and-hold” investor was considering an investment into Adobe Inc (NASD: ADBE) back in 2010: back then, such an investor may have been pondering this very same question. Had they answered “yes” to a full decade-long investment time horizon and then actually held for these past 10 years, here’s how that investment would have turned out.

Start date: 01/21/2010
$10,000

01/21/2010
$97,656

01/17/2020
End date: 01/17/2020
Start price/share: $35.82
End price/share: $349.74
Starting shares: 279.17
Ending shares: 279.17
Dividends reinvested/share: $0.00
Total return: 876.38%
Average annual return: 25.61%
Starting investment: $10,000.00
Ending investment: $97,656.14

As we can see, the decade-long investment result worked out exceptionally well, with an annualized rate of return of 25.61%. This would have turned a $10K investment made 10 years ago into $97,656.14 today (as of 01/17/2020). On a total return basis, that’s a result of 876.38% (something to think about: how might ADBE 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:
“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