“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 long-term investment horizon, where a decade-long holding period, or even longer, would fit right into the strategy. How would such a strategy have worked out for an investment into Vertex Pharmaceuticals, Inc. (NASD: VRTX)? Today, we examine the outcome of a decade-long investment into the stock back in 2011.
| Start date: | 08/31/2011 |
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| End date: | 08/30/2021 | ||||
| Start price/share: | $45.27 | ||||
| End price/share: | $199.49 | ||||
| Starting shares: | 220.90 | ||||
| Ending shares: | 220.90 | ||||
| Dividends reinvested/share: | $0.00 | ||||
| Total return: | 340.67% | ||||
| Average annual return: | 15.98% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $44,074.14 | ||||
As we can see, the decade-long investment result worked out exceptionally well, with an annualized rate of return of 15.98%. This would have turned a $10K investment made 10 years ago into $44,074.14 today (as of 08/30/2021). On a total return basis, that’s a result of 340.67% (something to think about: how might VRTX shares perform over the next 10 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
Another great investment quote to think about:
“If you have more than 120 or 130 I.Q. points, you can afford to give the rest away. You don’t need extraordinary intelligence to succeed as an investor.” — Warren Buffett
