“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 Incyte Corporation (NASD: INCY), by taking a look at the investment outcome over a decade-long holding period.
| Start date: | 08/30/2012 |
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| End date: | 08/29/2022 | ||||
| Start price/share: | $19.92 | ||||
| End price/share: | $70.51 | ||||
| Starting shares: | 502.01 | ||||
| Ending shares: | 502.01 | ||||
| Dividends reinvested/share: | $0.00 | ||||
| Total return: | 253.97% | ||||
| Average annual return: | 13.47% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $35,396.55 | ||||
As we can see, the decade-long investment result worked out quite well, with an annualized rate of return of 13.47%. This would have turned a $10K investment made 10 years ago into $35,396.55 today (as of 08/29/2022). On a total return basis, that’s a result of 253.97% (something to think about: how might INCY shares perform over the next 10 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
Another great investment quote to think about:
“Calling someone who trades actively in the market an investor is like calling someone who repeatedly engages in one-night stands a romantic.” — Warren Buffett
