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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 decade-long holding period possibly?

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

Start date: 11/17/2011


End date: 11/16/2021
Start price/share: $10.92
End price/share: $687.40
Starting shares: 915.75
Ending shares: 915.75
Dividends reinvested/share: $0.00
Total return: 6,194.87%
Average annual return: 51.29%
Starting investment: $10,000.00
Ending investment: $629,633.01

As shown above, the decade-long investment result worked out exceptionally well, with an annualized rate of return of 51.29%. This would have turned a $10K investment made 10 years ago into $629,633.01 today (as of 11/16/2021). On a total return basis, that’s a result of 6,194.87% (something to think about: how might NFLX shares perform over the next 10 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]

One more piece of investment wisdom to leave you with:
“Don’t look for the needle in the haystack, just buy the haystack.” — John Bogle