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“Someone’s sitting in the shade today because someone planted a tree a long time ago.”

— 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 two-decade holding period possibly?

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

Start date: 10/22/2001


End date: 10/19/2021
Start price/share: $17.50
End price/share: $353.44
Starting shares: 571.43
Ending shares: 571.43
Dividends reinvested/share: $0.00
Total return: 1,919.66%
Average annual return: 16.21%
Starting investment: $10,000.00
Ending investment: $201,942.40

As we can see, the two-decade investment result worked out exceptionally well, with an annualized rate of return of 16.21%. This would have turned a $10K investment made 20 years ago into $201,942.40 today (as of 10/19/2021). On a total return basis, that’s a result of 1,919.66% (something to think about: how might URI shares perform over the next 20 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]

One more investment quote to leave you with:
“If you don’t study any companies, you have the same success buying stocks as you do in a poker game if you bet without looking at your cards.” — Peter Lynch