“Only buy something that you’d be perfectly happy to hold if the market shut down for 10 years.”
— 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 ten year period?
Today, let’s look backwards in time to 2011, and take a look at what happened to investors who asked that very question about Boston Scientific Corp. (NYSE: BSX), by taking a look at the investment outcome over a ten year holding period.
| Start date: | 10/20/2011 |
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| End date: | 10/19/2021 | ||||
| Start price/share: | $5.39 | ||||
| End price/share: | $44.13 | ||||
| Starting shares: | 1,855.29 | ||||
| Ending shares: | 1,855.29 | ||||
| Dividends reinvested/share: | $0.00 | ||||
| Total return: | 718.74% | ||||
| Average annual return: | 23.39% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $81,903.00 | ||||
As shown above, the ten year investment result worked out exceptionally well, with an annualized rate of return of 23.39%. This would have turned a $10K investment made 10 years ago into $81,903.00 today (as of 10/19/2021). On a total return basis, that’s a result of 718.74% (something to think about: how might BSX 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:
“We don’t have to be smarter than the rest. We have to be more disciplined than the rest.” — Warren Buffett
