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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 two-decade 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 Mohawk Industries, Inc. (NYSE: MHK), by taking a look at the investment outcome over a two-decade holding period.

Start date: 04/30/2001


End date: 04/27/2021
Start price/share: $32.66
End price/share: $208.36
Starting shares: 306.18
Ending shares: 306.18
Dividends reinvested/share: $0.00
Total return: 537.97%
Average annual return: 9.71%
Starting investment: $10,000.00
Ending investment: $63,847.64

As shown above, the two-decade investment result worked out well, with an annualized rate of return of 9.71%. This would have turned a $10K investment made 20 years ago into $63,847.64 today (as of 04/27/2021). On a total return basis, that’s a result of 537.97% (something to think about: how might MHK shares perform over the next 20 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]

Another great investment quote to think about:
“The best stock to buy is the one you already own.” — Peter Lynch