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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

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 ten year holding period for an investor who was considering Illumina Inc (NASD: ILMN) back in 2010, bought the stock, ignored the market’s ups and downs, and simply held through to today.

Start date: 08/27/2010


End date: 08/26/2020
Start price/share: $44.03
End price/share: $353.56
Starting shares: 227.12
Ending shares: 227.12
Dividends reinvested/share: $0.00
Total return: 703.00%
Average annual return: 23.15%
Starting investment: $10,000.00
Ending investment: $80,322.96

As shown above, the ten year investment result worked out exceptionally well, with an annualized rate of return of 23.15%. This would have turned a $10K investment made 10 years ago into $80,322.96 today (as of 08/26/2020). On a total return basis, that’s a result of 703.00% (something to think about: how might ILMN 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:
“A market downturn doesn’t bother us. It is an opportunity to increase our ownership of great companies with great management at good prices.” — Warren Buffett