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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

Investors can learn a lot from Warren Buffett, whose above quote teaches the importance of thinking about investment time horizon, and asking ourselves before buying any given stock: can we envision holding onto it for years — even a ten year holding period possibly?

Suppose a “buy-and-hold” investor was considering an investment into Hologic Inc (NASD: HOLX) back in 2011: back then, such an investor may have been pondering this very same question. Had they answered “yes” to a full ten year investment time horizon and then actually held for these past 10 years, here’s how that investment would have turned out.

Start date: 01/14/2011


End date: 01/13/2021
Start price/share: $19.17
End price/share: $77.85
Starting shares: 521.65
Ending shares: 521.65
Dividends reinvested/share: $0.00
Total return: 306.10%
Average annual return: 15.04%
Starting investment: $10,000.00
Ending investment: $40,627.69

The above analysis shows the ten year investment result worked out exceptionally well, with an annualized rate of return of 15.04%. This would have turned a $10K investment made 10 years ago into $40,627.69 today (as of 01/13/2021). On a total return basis, that’s a result of 306.10% (something to think about: how might HOLX shares perform over the next 10 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]

One more investment quote to leave you with:
“You’ve got to be careful if you don’t know where you’re going, ’cause you might not get there.” — Yogi Berra