“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 longterm investment horizon, where a decadelong holding period, or even longer, would fit right into the strategy. How would such a strategy have worked out for an investment into Simon Property Group, Inc. (NYSE: SPG)? Today, we examine the outcome of a decadelong investment into the stock back in 2011.
Start date:  02/11/2011 


End date:  02/10/2021  
Start price/share:  $100.81  
End price/share:  $106.22  
Starting shares:  99.20  
Ending shares:  145.88  
Dividends reinvested/share:  $57.67  
Total return:  54.95%  
Average annual return:  4.47%  
Starting investment:  $10,000.00  
Ending investment:  $15,488.88 
As shown above, the decadelong investment result worked out as follows, with an annualized rate of return of 4.47%. This would have turned a $10K investment made 10 years ago into $15,488.88 today (as of 02/10/2021). On a total return basis, that’s a result of 54.95% (something to think about: how might SPG shares perform over the next 10 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
Notice that Simon Property Group, Inc. paid investors a total of $57.67/share in dividends over the 10 holding period, marking a second component of the total return beyond share price change alone. Much like watering a tree, reinvesting dividends can help an investment to grow over time — for the above calculations we assume dividend reinvestment (and for this exercise the closing price on exdate is used for the reinvestment of a given dividend).
Based upon the most recent annualized dividend rate of 5.2/share, we calculate that SPG has a current yield of approximately 4.90%. Another interesting datapoint we can examine is ‘yield on cost’ — in other words, we can express the current annualized dividend of 5.2 against the original $100.81/share purchase price. This works out to a yield on cost of 4.86%.
Here’s one more great investment quote before you go:
“If a speculator is correct half of the time, he is hitting a good average. Even being right 3 or 4 times out of 10 should yield a person a fortune if he has the sense to cut his losses quickly on the ventures where he is wrong.” — Bernard Baruch