“When we own portions of outstanding businesses with outstanding managements, our favorite holding period is forever.”
— Warren Buffett
The Warren Buffett investment philosophy calls for a long-term investment horizon, where a twenty year holding period, or even longer, would fit right into the strategy. How would such a strategy have worked out for an investment into Advanced Micro Devices Inc (NASD: AMD)? Today, we examine the outcome of a twenty year investment into the stock back in 2000.
| Start date: | 10/16/2000 |
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| End date: | 10/15/2020 | ||||
| Start price/share: | $20.38 | ||||
| End price/share: | $83.13 | ||||
| Starting shares: | 490.80 | ||||
| Ending shares: | 490.80 | ||||
| Dividends reinvested/share: | $0.00 | ||||
| Total return: | 308.00% | ||||
| Average annual return: | 7.28% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $40,804.66 | ||||
As shown above, the twenty year investment result worked out well, with an annualized rate of return of 7.28%. This would have turned a $10K investment made 20 years ago into $40,804.66 today (as of 10/15/2020). On a total return basis, that’s a result of 308.00% (something to think about: how might AMD shares perform over the next 20 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
Here’s one more great investment quote before you go:
“Far more money has been lost by investors trying to anticipate corrections, than lost in the corrections themselves.” — Peter Lynch
