“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.
|Average annual return:||5.73%|
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