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

— Warren Buffett

This inspiring quote from Warren Buffett teaches us the importance of considering our investment time horizon when approaching any given investment: Could we envision ourselves holding the stock we are considering for many years? Even a twenty year holding period potentially?

For “buy-and-hold” investors taking a long-term view, what’s important isn’t the short-term stock market fluctuations that will inevitably occur, but what happens over the long haul. Looking back 20 years to 2001, investors considering an investment into shares of Inc (NASD: AMZN) may have been pondering this very question and thinking about their potential investment result over a full twenty year time horizon. Here’s how that would have worked out.

Start date: 03/05/2001


End date: 03/02/2021
Start price/share: $12.62
End price/share: $3,094.53
Starting shares: 792.08
Ending shares: 792.08
Dividends reinvested/share: $0.00
Total return: 24,411.13%
Average annual return: 31.65%
Starting investment: $10,000.00
Ending investment: $2,449,467.21

As we can see, the twenty year investment result worked out exceptionally well, with an annualized rate of return of 31.65%. This would have turned a $10K investment made 20 years ago into $2,449,467.21 today (as of 03/02/2021). On a total return basis, that’s a result of 24,411.13% (something to think about: how might AMZN shares perform over the next 20 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]

One more investment quote to leave you with:
“One of the funny things about the stock market is that every time one person buys, another sells, and both think they are astute.” — William Feather