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“Someone’s sitting in the shade today because someone planted a tree a long time ago.”

— 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 twenty year period?

Today, let’s look backwards in time to 2000, and take a look at what happened to investors who asked that very question about Inc (NASD: AMZN), by taking a look at the investment outcome over a twenty year holding period.

Start date: 06/19/2000


End date: 06/16/2020
Start price/share: $45.31
End price/share: $2,615.27
Starting shares: 220.69
Ending shares: 220.69
Dividends reinvested/share: $0.00
Total return: 5,671.63%
Average annual return: 22.47%
Starting investment: $10,000.00
Ending investment: $576,868.35

The above analysis shows the twenty year investment result worked out exceptionally well, with an annualized rate of return of 22.47%. This would have turned a $10K investment made 20 years ago into $576,868.35 today (as of 06/16/2020). On a total return basis, that’s a result of 5,671.63% (something to think about: how might AMZN shares perform over the next 20 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]

One more piece of investment wisdom to leave you with:
“Markets can remain irrational longer than you can remain solvent.” — John Maynard Keynes