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“When we own portions of outstanding businesses with outstanding managements, our favorite holding period is forever.”

— Warren Buffett

One of the most important things investors can learn from Warren Buffett, is about how they approach their time horizon for an investment into a stock under consideration. Because immediately after buying shares of a given stock, investors will then be able to check on the day-to-day (and even minute-by-minute) market value. Some days the stock market will be up, other days down. These daily fluctuations can often distract from the long-term view. Today, we look at the result of a twenty year holding period for an investor who was considering F5 Inc (NASD: FFIV) back in 2002, bought the stock, ignored the market’s ups and downs, and simply held through to today.

Start date: 06/24/2002


End date: 06/21/2022
Start price/share: $4.62
End price/share: $152.83
Starting shares: 2,164.50
Ending shares: 2,164.50
Dividends reinvested/share: $0.00
Total return: 3,208.01%
Average annual return: 19.11%
Starting investment: $10,000.00
Ending investment: $330,659.23

As we can see, the twenty year investment result worked out exceptionally well, with an annualized rate of return of 19.11%. This would have turned a $10K investment made 20 years ago into $330,659.23 today (as of 06/21/2022). On a total return basis, that’s a result of 3,208.01% (something to think about: how might FFIV shares perform over the next 20 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]

Here’s one more great investment quote before you go:
“There is nothing riskier than the widespread perception that there is no risk.” — Howard Marks