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“Someone’s sitting in the shade today because someone planted a tree a long time ago.”

— 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 twenty year period?

Today, let’s look backwards in time to 2001, and take a look at what happened to investors who asked that very question about F5 Networks, Inc. (NASD: FFIV), by taking a look at the investment outcome over a twenty year holding period.

Start date: 02/20/2001


End date: 02/17/2021
Start price/share: $4.81
End price/share: $204.14
Starting shares: 2,079.00
Ending shares: 2,079.00
Dividends reinvested/share: $0.00
Total return: 4,144.07%
Average annual return: 20.61%
Starting investment: $10,000.00
Ending investment: $424,729.36

As shown above, the twenty year investment result worked out exceptionally well, with an annualized rate of return of 20.61%. This would have turned a $10K investment made 20 years ago into $424,729.36 today (as of 02/17/2021). On a total return basis, that’s a result of 4,144.07% (something to think about: how might FFIV shares perform over the next 20 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]

One more piece of investment wisdom to leave you with:
“If you are not willing to own a stock for 10 years, do not even think about owning it for 10 minutes.” — Warren Buffett