“Only buy something that you’d be perfectly happy to hold if the market shut down for 10 years.”
— Warren Buffett
The above quote from Warren Buffett is timeless, and brings into focus the choice about time horizon that any investor should think about before buying a stock they are considering. Behind every stock is an actual business; what will that business look like over a decade-long period?
Today, let’s look backwards in time to 2010, and take a look at what happened to investors who asked that very question about Adobe Inc (NASD: ADBE), by taking a look at the investment outcome over a decade-long holding period.
|Average annual return:||34.60%|
The above analysis shows the decade-long investment result worked out exceptionally well, with an annualized rate of return of 34.60%. This would have turned a $10K investment made 10 years ago into $195,186.87 today (as of 10/01/2020). On a total return basis, that’s a result of 1,851.21% (something to think about: how might ADBE shares perform over the next 10 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
Another great investment quote to think about:
“Value investing means really asking what are the best values, and not assuming that because something looks expensive that it is, or assuming that because a stock is down in price and trades at low multiples that it is a bargain.” — Bill Miller