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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 wisdom of Warren Buffett reflects a value-based philosophy about investing that says investors are buying shares in a business, and encourages strategic thinking about investment time horizon. Before placing a buy order for a stock, a great question we can ask is whether we would still be comfortable making the investment if we couldn’t sell it for many years?

A “buy-and-hold” approach may call for a time horizon that spans a long period of time — maybe even lasting for a ten year holding period. Suppose such a “buy-and-hold” investor had looked into buying shares of Centene Corp (NYSE: CNC) back in 2010. Let’s take a look at how such an investment would have worked out for that buy-and-hold investor:

Start date: 07/01/2010


End date: 06/30/2020
Start price/share: $5.29
End price/share: $63.55
Starting shares: 1,890.36
Ending shares: 1,890.36
Dividends reinvested/share: $0.00
Total return: 1,101.32%
Average annual return: 28.21%
Starting investment: $10,000.00
Ending investment: $120,173.96

The above analysis shows the ten year investment result worked out exceptionally well, with an annualized rate of return of 28.21%. This would have turned a $10K investment made 10 years ago into $120,173.96 today (as of 06/30/2020). On a total return basis, that’s a result of 1,101.32% (something to think about: how might CNC 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:
“If I’ve learned one thing in this life it’s this: even if you lose, don’t lose the lesson.” — Daymond John