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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

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 Mosaic Co (NYSE: MOS)? Today, we examine the outcome of a decade-long investment into the stock back in 2011.

Start date: 12/27/2011


End date: 12/23/2021
Start price/share: $52.33
End price/share: $39.18
Starting shares: 191.09
Ending shares: 227.66
Dividends reinvested/share: $6.20
Total return: -10.80%
Average annual return: -1.14%
Starting investment: $10,000.00
Ending investment: $8,917.02

As we can see, the decade-long investment result worked out poorly, with an annualized rate of return of -1.14%. This would have turned a $10K investment made 10 years ago into $8,917.02 today (as of 12/23/2021). On a total return basis, that’s a result of -10.80% (something to think about: how might MOS shares perform over the next 10 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]

Notice that Mosaic Co paid investors a total of $6.20/share in dividends over the 10 holding period, marking a second component of the total return beyond share price change alone. Much like watering a tree, reinvesting dividends can help an investment to grow over time — for the above calculations we assume dividend reinvestment (and for this exercise the closing price on ex-date is used for the reinvestment of a given dividend).

Based upon the most recent annualized dividend rate of .45/share, we calculate that MOS has a current yield of approximately 1.15%. Another interesting datapoint we can examine is ‘yield on cost’ — in other words, we can express the current annualized dividend of .45 against the original $52.33/share purchase price. This works out to a yield on cost of 2.20%.

More investment wisdom to ponder:
“You can get in much more trouble with a good idea than a bad idea, because you forget that the good idea has limits.” — Benjamin Graham