“Someone’s sitting in the shade today because someone planted a tree a long time ago.”
— 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 two-decade holding period for an investor who was considering Biogen Inc (NASD: BIIB) back in 2000, bought the stock, ignored the market’s ups and downs, and simply held through to today.
| Start date: | 06/05/2000 |
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| End date: | 06/02/2020 | ||||
| Start price/share: | $88.75 | ||||
| End price/share: | $302.86 | ||||
| Starting shares: | 112.68 | ||||
| Ending shares: | 112.68 | ||||
| Dividends reinvested/share: | $0.00 | ||||
| Total return: | 241.25% | ||||
| Average annual return: | 6.33% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $34,139.91 | ||||
The above analysis shows the two-decade investment result worked out well, with an annualized rate of return of 6.33%. This would have turned a $10K investment made 20 years ago into $34,139.91 today (as of 06/02/2020). On a total return basis, that’s a result of 241.25% (something to think about: how might BIIB 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:
“The greater the passive income you can build, the freer you will become.” — Todd Fleming
