Photo credit:

“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 twenty year holding period possibly?

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

Start date: 11/30/2001


End date: 11/29/2021
Start price/share: $70.30
End price/share: $236.11
Starting shares: 142.25
Ending shares: 142.25
Dividends reinvested/share: $0.00
Total return: 235.86%
Average annual return: 6.24%
Starting investment: $10,000.00
Ending investment: $33,577.58

As we can see, the twenty year investment result worked out well, with an annualized rate of return of 6.24%. This would have turned a $10K investment made 20 years ago into $33,577.58 today (as of 11/29/2021). On a total return basis, that’s a result of 235.86% (something to think about: how might BIIB 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:
“Price is what you pay. Value is what you get.” — Warren Buffett