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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 Adobe Inc (NASD: ADBE) back in 2010, bought the stock, ignored the market’s ups and downs, and simply held through to today.

Start date: 11/02/2010


End date: 10/30/2020
Start price/share: $29.02
End price/share: $447.10
Starting shares: 344.59
Ending shares: 344.59
Dividends reinvested/share: $0.00
Total return: 1,440.66%
Average annual return: 31.45%
Starting investment: $10,000.00
Ending investment: $154,030.21

The above analysis shows the ten year investment result worked out exceptionally well, with an annualized rate of return of 31.45%. This would have turned a $10K investment made 10 years ago into $154,030.21 today (as of 10/30/2020). On a total return basis, that’s a result of 1,440.66% (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:
“The emotional burden of trading is substantial; on any given day, I could lose millions of dollars. If you personalize these losses, you can’t trade.” — Bruce Kovner