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

— 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 two-decade period?

Today, let’s look backwards in time to 2002, 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 two-decade holding period.

Start date: 07/19/2002


End date: 07/18/2022
Start price/share: $2.27
End price/share: $254.08
Starting shares: 4,405.29
Ending shares: 4,405.29
Dividends reinvested/share: $0.00
Total return: 11,092.95%
Average annual return: 26.59%
Starting investment: $10,000.00
Ending investment: $1,119,721.93

As shown above, the two-decade investment result worked out exceptionally well, with an annualized rate of return of 26.59%. This would have turned a $10K investment made 20 years ago into $1,119,721.93 today (as of 07/18/2022). On a total return basis, that’s a result of 11,092.95% (something to think about: how might ALGN 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:
“Compound interest is the eighth wonder of the world. He who understands it, earns it; he who doesn’t, pays it.” — Albert Einstein