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“When we own portions of outstanding businesses with outstanding managements, our favorite holding period is forever.”

— 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 twenty year holding period possibly?

Suppose a “buy-and-hold” investor was considering an investment into Illumina Inc (NASD: ILMN) back in 2001: back then, such an investor may have been pondering this very same question. Had they answered “yes” to a full twenty year investment time horizon and then actually held for these past 20 years, here’s how that investment would have turned out.

Start date: 03/23/2001


End date: 03/22/2021
Start price/share: $4.03
End price/share: $429.92
Starting shares: 2,481.39
Ending shares: 2,481.39
Dividends reinvested/share: $0.00
Total return: 10,567.99%
Average annual return: 26.29%
Starting investment: $10,000.00
Ending investment: $1,067,117.97

As shown above, the twenty year investment result worked out exceptionally well, with an annualized rate of return of 26.29%. This would have turned a $10K investment made 20 years ago into $1,067,117.97 today (as of 03/22/2021). On a total return basis, that’s a result of 10,567.99% (something to think about: how might ILMN 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:
“The policy of being too cautious is the greatest risk of all.” — Jawaharlal Nehru