“Someone’s sitting in the shade today because someone planted a tree a long time ago.”
— 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 2000.
| Start date: | 02/25/2000 |
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| End date: | 02/24/2020 | ||||
| Start price/share: | $83.75 | ||||
| End price/share: | $107.03 | ||||
| Starting shares: | 119.40 | ||||
| Ending shares: | 119.40 | ||||
| Dividends reinvested/share: | $0.00 | ||||
| Total return: | 27.80% | ||||
| Average annual return: | 1.23% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $12,771.53 | ||||
As shown above, the twenty year investment result worked out as follows, with an annualized rate of return of 1.23%. This would have turned a $10K investment made 20 years ago into $12,771.53 today (as of 02/24/2020). On a total return basis, that’s a result of 27.80% (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.]
Here’s one more great investment quote before you go:
“You don’t need to be a rocket scientist. Investing is not a game where the guy with the 160 IQ beats the guy with 130 IQ.” — Warren Buffett
