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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 ten year holding period possibly?

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

Start date: 12/21/2011


End date: 12/20/2021
Start price/share: $37.48
End price/share: $106.93
Starting shares: 266.81
Ending shares: 266.81
Dividends reinvested/share: $0.00
Total return: 185.30%
Average annual return: 11.05%
Starting investment: $10,000.00
Ending investment: $28,538.76

As we can see, the ten year investment result worked out quite well, with an annualized rate of return of 11.05%. This would have turned a $10K investment made 10 years ago into $28,538.76 today (as of 12/20/2021). On a total return basis, that’s a result of 185.30% (something to think about: how might DVA 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:
“The whole secret to winning big in the stock market is not to be right all the time, but to lose the least amount possible when you’re wrong.” — William O’Neil