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“Someone’s sitting in the shade today because someone planted a tree a long time ago.”

— 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 two-decade holding period for an investor who was considering Advanced Micro Devices Inc (NASD: AMD) back in 2002, bought the stock, ignored the market’s ups and downs, and simply held through to today.

Start date: 10/07/2002
$10,000

10/07/2002
  $212,079

10/06/2022
End date: 10/06/2022
Start price/share: $3.20
End price/share: $67.85
Starting shares: 3,125.00
Ending shares: 3,125.00
Dividends reinvested/share: $0.00
Total return: 2,020.31%
Average annual return: 16.49%
Starting investment: $10,000.00
Ending investment: $212,079.82

As shown above, the two-decade investment result worked out exceptionally well, with an annualized rate of return of 16.49%. This would have turned a $10K investment made 20 years ago into $212,079.82 today (as of 10/06/2022). On a total return basis, that’s a result of 2,020.31% (something to think about: how might AMD shares perform over the next 20 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]

More investment wisdom to ponder:
“Cash is a fact, profit is an opinion.” — Alfred Rappaport