“Someone’s sitting in the shade today because someone planted a tree a long time ago.”
— 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 twenty year holding period for an investor who was considering Monster Beverage Corp (NASD: MNST) back in 2001, bought the stock, ignored the market’s ups and downs, and simply held through to today.
| Start date: | 02/26/2001 |
|
|||
| End date: | 02/25/2021 | ||||
| Start price/share: | $0.63 | ||||
| End price/share: | $85.35 | ||||
| Starting shares: | 15,873.02 | ||||
| Ending shares: | 15,873.02 | ||||
| Dividends reinvested/share: | $0.00 | ||||
| Total return: | 13,447.62% | ||||
| Average annual return: | 27.80% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $1,354,517.24 | ||||
The above analysis shows the twenty year investment result worked out exceptionally well, with an annualized rate of return of 27.80%. This would have turned a $10K investment made 20 years ago into $1,354,517.24 today (as of 02/25/2021). On a total return basis, that’s a result of 13,447.62% (something to think about: how might MNST shares perform over the next 20 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
Here’s one more great investment quote before you go:
“He who earns and does not invest will have to work for the rest of his life.” — Debasish Mridha
