“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 decade-long 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 Dollar Tree Inc (NASD: DLTR), by taking a look at the investment outcome over a decade-long holding period.
| Start date: | 03/15/2012 |
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| End date: | 03/14/2022 | ||||
| Start price/share: | $46.76 | ||||
| End price/share: | $151.08 | ||||
| Starting shares: | 213.86 | ||||
| Ending shares: | 213.86 | ||||
| Dividends reinvested/share: | $0.00 | ||||
| Total return: | 223.10% | ||||
| Average annual return: | 12.44% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $32,310.81 | ||||
As we can see, the decade-long investment result worked out quite well, with an annualized rate of return of 12.44%. This would have turned a $10K investment made 10 years ago into $32,310.81 today (as of 03/14/2022). On a total return basis, that’s a result of 223.10% (something to think about: how might DLTR 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:
“Spend each day trying to be a little wiser than you were when you woke up.” — Charlie Munger
