“Someone’s sitting in the shade today because someone planted a tree a long time ago.”
— 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 two-decade holding period possibly?
Suppose a “buy-and-hold” investor was considering an investment into Mettler-Toledo International, Inc. (NYSE: MTD) back in 2002: back then, such an investor may have been pondering this very same question. Had they answered “yes” to a full two-decade investment time horizon and then actually held for these past 20 years, here’s how that investment would have turned out.
| Start date: | 03/04/2002 |
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| End date: | 03/02/2022 | ||||
| Start price/share: | $45.05 | ||||
| End price/share: | $1,387.30 | ||||
| Starting shares: | 221.98 | ||||
| Ending shares: | 221.98 | ||||
| Dividends reinvested/share: | $0.00 | ||||
| Total return: | 2,979.47% | ||||
| Average annual return: | 18.68% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $307,724.50 | ||||
As shown above, the two-decade investment result worked out exceptionally well, with an annualized rate of return of 18.68%. This would have turned a $10K investment made 20 years ago into $307,724.50 today (as of 03/02/2022). On a total return basis, that’s a result of 2,979.47% (something to think about: how might MTD shares perform over the next 20 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
Another great investment quote to think about:
“People who invest make money for themselves; people who speculate make money for their brokers.” — Benjamin Graham
