“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 Alexion Pharmaceuticals Inc. (NASD: ALXN), by taking a look at the investment outcome over a ten year holding period.
|Average annual return:||15.04%|
As shown above, the ten year investment result worked out exceptionally well, with an annualized rate of return of 15.04%. This would have turned a $10K investment made 10 years ago into $40,596.51 today (as of 06/12/2020). On a total return basis, that’s a result of 305.87% (something to think about: how might ALXN 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:
“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