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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 Monster Beverage Corp (NASD: MNST) back in 2012: 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: 01/31/2012


End date: 01/28/2022
Start price/share: $17.42
End price/share: $85.31
Starting shares: 574.05
Ending shares: 574.05
Dividends reinvested/share: $0.00
Total return: 389.72%
Average annual return: 17.22%
Starting investment: $10,000.00
Ending investment: $48,979.82

As shown above, the ten year investment result worked out exceptionally well, with an annualized rate of return of 17.22%. This would have turned a $10K investment made 10 years ago into $48,979.82 today (as of 01/28/2022). On a total return basis, that’s a result of 389.72% (something to think about: how might MNST 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:
“Markets can remain irrational longer than you can remain solvent.” — John Maynard Keynes