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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

One of the most important things investors can learn from Warren Buffett, is about how they approach their time horizon for an investment into a stock under consideration. Because immediately after buying shares of a given stock, investors will then be able to check on the day-to-day (and even minute-by-minute) market value. Some days the stock market will be up, other days down. These daily fluctuations can often distract from the long-term view. Today, we look at the result of a decade-long holding period for an investor who was considering Netflix Inc (NASD: NFLX) back in 2010, bought the stock, ignored the market’s ups and downs, and simply held through to today.

Start date: 05/03/2010


End date: 04/30/2020
Start price/share: $14.57
End price/share: $419.85
Starting shares: 686.34
Ending shares: 686.34
Dividends reinvested/share: $0.00
Total return: 2,781.61%
Average annual return: 39.95%
Starting investment: $10,000.00
Ending investment: $288,223.26

As we can see, the decade-long investment result worked out exceptionally well, with an annualized rate of return of 39.95%. This would have turned a $10K investment made 10 years ago into $288,223.26 today (as of 04/30/2020). On a total return basis, that’s a result of 2,781.61% (something to think about: how might NFLX 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:
“Behind every stock is a company. Find out what it’s doing.” — Peter Lynch