“Someone’s sitting in the shade today because someone planted a tree a long time ago.”
— Warren Buffett
The investment philosophy practiced by Warren Buffett calls for investors to take a long-term horizon when making an investment, such as a two-decade holding period (or even longer), and reconsider making the investment in the first place if unable to envision holding the stock for at least five years. Today, we look at how such a long-term strategy would have done for investors in Dollar Tree Inc (NASD: DLTR) back in 2000, holding through to today.
| Start date: | 09/01/2000 |
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| End date: | 08/31/2020 | ||||
| Start price/share: | $14.36 | ||||
| End price/share: | $96.27 | ||||
| Starting shares: | 696.38 | ||||
| Ending shares: | 696.38 | ||||
| Dividends reinvested/share: | $0.00 | ||||
| Total return: | 570.40% | ||||
| Average annual return: | 9.98% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $67,100.70 | ||||
As shown above, the two-decade investment result worked out well, with an annualized rate of return of 9.98%. This would have turned a $10K investment made 20 years ago into $67,100.70 today (as of 08/31/2020). On a total return basis, that’s a result of 570.40% (something to think about: how might DLTR shares perform over the next 20 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
More investment wisdom to ponder:
“The older I get, the more I see a straight path where I want to go. If you’re going to hunt elephants, don’t get off the trail for a rabbit.” — T. Boone Pickens
