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“Only buy something that you’d be perfectly happy to hold if the market shut down for 10 years.”

— 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 ten year holding period possibly?

Suppose a “buy-and-hold” investor was considering an investment into F5 Networks, Inc. (NASD: FFIV) back in 2011: back then, such an investor may have been pondering this very same question. Had they answered “yes” to a full ten year investment time horizon and then actually held for these past 10 years, here’s how that investment would have turned out.

Start date: 05/23/2011


End date: 05/20/2021
Start price/share: $104.76
End price/share: $185.06
Starting shares: 95.46
Ending shares: 95.46
Dividends reinvested/share: $0.00
Total return: 76.65%
Average annual return: 5.86%
Starting investment: $10,000.00
Ending investment: $17,673.35

The above analysis shows the ten year investment result worked out well, with an annualized rate of return of 5.86%. This would have turned a $10K investment made 10 years ago into $17,673.35 today (as of 05/20/2021). On a total return basis, that’s a result of 76.65% (something to think about: how might FFIV shares perform over the next 10 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]

Here’s one more great investment quote before you go:
“I rarely think the market is right. I believe non-dividend stocks aren’t much more than baseball cards. They are worth what you can convince someone to pay for it.” — Mark Cuban