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“Only buy something that you’d be perfectly happy to hold if the market shut down for 10 years.”

— 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 decade-long holding period for an investor who was considering Mohawk Industries, Inc. (NYSE: MHK) back in 2012, bought the stock, ignored the market’s ups and downs, and simply held through to today.

Start date: 08/15/2012


End date: 08/12/2022
Start price/share: $72.75
End price/share: $127.00
Starting shares: 137.46
Ending shares: 137.46
Dividends reinvested/share: $0.00
Total return: 74.57%
Average annual return: 5.73%
Starting investment: $10,000.00
Ending investment: $17,454.85

As shown above, the decade-long investment result worked out well, with an annualized rate of return of 5.73%. This would have turned a $10K investment made 10 years ago into $17,454.85 today (as of 08/12/2022). On a total return basis, that’s a result of 74.57% (something to think about: how might MHK 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:
“Buy not on optimism, but on arithmetic.” — Benjamin Graham