“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 Mohawk Industries, Inc. (NYSE: MHK) 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.
|Average annual return:||7.57%|
The above analysis shows the ten year investment result worked out well, with an annualized rate of return of 7.57%. This would have turned a $10K investment made 10 years ago into $20,744.92 today (as of 08/21/2020). On a total return basis, that’s a result of 107.44% (something to think about: how might MHK 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:
“Most investors want to do today what they should have done yesterday.” — Larry Summers