“When we own portions of outstanding businesses with outstanding managements, our favorite holding period is forever.”
— Warren Buffett
The Warren Buffett investment philosophy calls for a long-term investment horizon, where a two-decade holding period, or even longer, would fit right into the strategy. How would such a strategy have worked out for an investment into Boston Scientific Corp. (NYSE: BSX)? Today, we examine the outcome of a two-decade investment into the stock back in 2002.
| Start date: | 04/12/2002 |
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| End date: | 04/11/2022 | ||||
| Start price/share: | $13.00 | ||||
| End price/share: | $44.22 | ||||
| Starting shares: | 769.23 | ||||
| Ending shares: | 769.23 | ||||
| Dividends reinvested/share: | $0.00 | ||||
| Total return: | 240.15% | ||||
| Average annual return: | 6.31% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $34,023.08 | ||||
As shown above, the two-decade investment result worked out well, with an annualized rate of return of 6.31%. This would have turned a $10K investment made 20 years ago into $34,023.08 today (as of 04/11/2022). On a total return basis, that’s a result of 240.15% (something to think about: how might BSX shares perform over the next 20 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
One more piece of investment wisdom to leave you with:
“Investors should always keep in mind that the most important metric is not the returns achieved but the returns weighed against the risks incurred. Ultimately, nothing should be more important to investors than the ability to sleep soundly at night.” — Seth Klarman
