“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 Align Technology Inc (NASD: ALGN), by taking a look at the investment outcome over a decade-long holding period.
| Start date: | 06/29/2012 |
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| End date: | 06/28/2022 | ||||
| Start price/share: | $33.46 | ||||
| End price/share: | $241.92 | ||||
| Starting shares: | 298.86 | ||||
| Ending shares: | 298.86 | ||||
| Dividends reinvested/share: | $0.00 | ||||
| Total return: | 623.01% | ||||
| Average annual return: | 21.87% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $72,310.85 | ||||
As shown above, the decade-long investment result worked out exceptionally well, with an annualized rate of return of 21.87%. This would have turned a $10K investment made 10 years ago into $72,310.85 today (as of 06/28/2022). On a total return basis, that’s a result of 623.01% (something to think about: how might ALGN shares perform over the next 10 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
More investment wisdom to ponder:
“If a speculator is correct half of the time, he is hitting a good average. Even being right 3 or 4 times out of 10 should yield a person a fortune if he has the sense to cut his losses quickly on the ventures where he is wrong.” — Bernard Baruch
