“Only buy something that you’d be perfectly happy to hold if the market shut down for 10 years.”
— Warren Buffett
One of the most important things investors can learn from Warren Buffett, is about how they approach their time horizon for an investment into a stock under consideration. Because immediately after buying shares of a given stock, investors will then be able to check on the day-to-day (and even minute-by-minute) market value. Some days the stock market will be up, other days down. These daily fluctuations can often distract from the long-term view. Today, we look at the result of a ten year holding period for an investor who was considering United Airlines Holdings Inc (NASD: UAL) back in 2012, bought the stock, ignored the market’s ups and downs, and simply held through to today.
| Start date: | 01/30/2012 |
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| End date: | 01/27/2022 | ||||
| Start price/share: | $22.99 | ||||
| End price/share: | $40.93 | ||||
| Starting shares: | 434.97 | ||||
| Ending shares: | 434.97 | ||||
| Dividends reinvested/share: | $0.00 | ||||
| Total return: | 78.03% | ||||
| Average annual return: | 5.94% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $17,807.37 | ||||
As we can see, the ten year investment result worked out well, with an annualized rate of return of 5.94%. This would have turned a $10K investment made 10 years ago into $17,807.37 today (as of 01/27/2022). On a total return basis, that’s a result of 78.03% (something to think about: how might UAL shares perform over the next 10 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
Here’s one more great investment quote before you go:
“If I’ve learned one thing in this life it’s this: even if you lose, don’t lose the lesson.” — Daymond John
