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“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 twenty year holding period possibly?

Suppose a “buy-and-hold” investor was considering an investment into United Rentals Inc (NYSE: URI) back in 2002: back then, such an investor may have been pondering this very same question. Had they answered “yes” to a full twenty year investment time horizon and then actually held for these past 20 years, here’s how that investment would have turned out.

Start date: 05/28/2002


End date: 05/24/2022
Start price/share: $23.53
End price/share: $267.74
Starting shares: 424.99
Ending shares: 424.99
Dividends reinvested/share: $0.00
Total return: 1,037.87%
Average annual return: 12.93%
Starting investment: $10,000.00
Ending investment: $113,849.53

As we can see, the twenty year investment result worked out quite well, with an annualized rate of return of 12.93%. This would have turned a $10K investment made 20 years ago into $113,849.53 today (as of 05/24/2022). On a total return basis, that’s a result of 1,037.87% (something to think about: how might URI shares perform over the next 20 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]

More investment wisdom to ponder:
“To achieve satisfactory investment results is easier than most people realize; to achieve superior results is harder than it looks.” — Benjamin Graham