“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 Mettler-Toledo International, Inc. (NYSE: MTD), by taking a look at the investment outcome over a decade-long holding period.
| Start date: | 11/03/2010 |
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| End date: | 11/02/2020 | ||||
| Start price/share: | $133.00 | ||||
| End price/share: | $1,043.25 | ||||
| Starting shares: | 75.19 | ||||
| Ending shares: | 75.19 | ||||
| Dividends reinvested/share: | $0.00 | ||||
| Total return: | 684.40% | ||||
| Average annual return: | 22.86% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $78,450.38 | ||||
The above analysis shows the decade-long investment result worked out exceptionally well, with an annualized rate of return of 22.86%. This would have turned a $10K investment made 10 years ago into $78,450.38 today (as of 11/02/2020). On a total return basis, that’s a result of 684.40% (something to think about: how might MTD 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:
“In the end, how your investments behave is much less important than how you behave.” — Benjamin Graham
