“Only buy something that you’d be perfectly happy to hold if the market shut down for 10 years.”
— Warren Buffett
The Warren Buffett investment philosophy calls for a long-term investment horizon, where a decade-long holding period, or even longer, would fit right into the strategy. How would such a strategy have worked out for an investment into Amazon.com Inc (NASD: AMZN)? Today, we examine the outcome of a decade-long investment into the stock back in 2010.
| Start date: | 12/31/2010 |
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| End date: | 12/30/2020 | ||||
| Start price/share: | $180.00 | ||||
| End price/share: | $3,285.85 | ||||
| Starting shares: | 55.56 | ||||
| Ending shares: | 55.56 | ||||
| Dividends reinvested/share: | $0.00 | ||||
| Total return: | 1,725.47% | ||||
| Average annual return: | 33.68% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $182,538.78 | ||||
As shown above, the decade-long investment result worked out exceptionally well, with an annualized rate of return of 33.68%. This would have turned a $10K investment made 10 years ago into $182,538.78 today (as of 12/30/2020). On a total return basis, that’s a result of 1,725.47% (something to think about: how might AMZN 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:
“You get recessions, you have stock market declines. If you don’t understand that’s going to happen, then you’re not ready, you won’t do well in the markets.” — Peter Lynch
