“Only buy something that you’d be perfectly happy to hold if the market shut down for 10 years.”
— Warren Buffett
The above quote from Warren Buffett is timeless, and brings into focus the choice about time horizon that any investor should think about before buying a stock they are considering. Behind every stock is an actual business; what will that business look like over a ten year period?
Today, let’s look backwards in time to 2012, and take a look at what happened to investors who asked that very question about United Airlines Holdings Inc (NASD: UAL), by taking a look at the investment outcome over a ten year holding period.
|Average annual return:||7.56%|
As we can see, the ten year investment result worked out well, with an annualized rate of return of 7.56%. This would have turned a $10K investment made 10 years ago into $20,721.50 today (as of 03/02/2022). On a total return basis, that’s a result of 107.23% (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.]
Another great investment quote to think about:
“Taking risks is really the only way to consistently achieve above-average returns.” — Sam Zell