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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

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 ten year period?

Today, let’s look backwards in time to 2010, and take a look at what happened to investors who asked that very question about Electronic Arts, Inc. (NASD: EA), by taking a look at the investment outcome over a ten year holding period.

Start date: 03/10/2010
$10,000

03/10/2010
$56,401

03/09/2020
End date: 03/09/2020
Start price/share: $17.89
End price/share: $100.93
Starting shares: 558.97
Ending shares: 558.97
Dividends reinvested/share: $0.00
Total return: 464.17%
Average annual return: 18.88%
Starting investment: $10,000.00
Ending investment: $56,401.90

The above analysis shows the ten year investment result worked out exceptionally well, with an annualized rate of return of 18.88%. This would have turned a $10K investment made 10 years ago into $56,401.90 today (as of 03/09/2020). On a total return basis, that’s a result of 464.17% (something to think about: how might EA 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:
“People who succeed in the stock market also accept periodic losses, setbacks, and unexpected occurrences. Calamitous drops do not scare them out of the game.” — Peter Lynch