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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

Investors can learn a lot from Warren Buffett, whose above quote teaches the importance of thinking about investment time horizon, and asking ourselves before buying any given stock: can we envision holding onto it for years — even a ten year holding period possibly?

Suppose a “buy-and-hold” investor was considering an investment into DexCom Inc (NASD: DXCM) back in 2010: back then, such an investor may have been pondering this very same question. Had they answered “yes” to a full ten year investment time horizon and then actually held for these past 10 years, here’s how that investment would have turned out.

Start date: 07/12/2010


End date: 07/09/2020
Start price/share: $11.07
End price/share: $440.50
Starting shares: 903.34
Ending shares: 903.34
Dividends reinvested/share: $0.00
Total return: 3,879.22%
Average annual return: 44.54%
Starting investment: $10,000.00
Ending investment: $397,997.65

As shown above, the ten year investment result worked out exceptionally well, with an annualized rate of return of 44.54%. This would have turned a $10K investment made 10 years ago into $397,997.65 today (as of 07/09/2020). On a total return basis, that’s a result of 3,879.22% (something to think about: how might DXCM 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:
“I think you have to learn that there’s a company behind every stock, and that there’s only one real reason why stocks go up. Companies go from doing poorly to doing well or small companies grow to large companies.” — Peter Lynch