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“Only buy something that you’d be perfectly happy to hold if the market shut down for 10 years.”

— 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 decade-long holding period possibly?

Suppose a “buy-and-hold” investor was considering an investment into Fortinet Inc (NASD: FTNT) back in 2012: back then, such an investor may have been pondering this very same question. Had they answered “yes” to a full decade-long investment time horizon and then actually held for these past 10 years, here’s how that investment would have turned out.

Start date: 05/16/2012
$10,000

05/16/2012
$116,240

05/13/2022
End date: 05/13/2022
Start price/share: $24.23
End price/share: $281.55
Starting shares: 412.71
Ending shares: 412.71
Dividends reinvested/share: $0.00
Total return: 1,061.99%
Average annual return: 27.81%
Starting investment: $10,000.00
Ending investment: $116,240.21

As shown above, the decade-long investment result worked out exceptionally well, with an annualized rate of return of 27.81%. This would have turned a $10K investment made 10 years ago into $116,240.21 today (as of 05/13/2022). On a total return basis, that’s a result of 1,061.99% (something to think about: how might FTNT shares perform over the next 10 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]

One more piece of investment wisdom to leave you with:
“Compound interest is the eighth wonder of the world. He who understands it, earns it; he who doesn’t, pays it.” — Albert Einstein