“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 ten year 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 Salesforce Inc (NYSE: CRM), by taking a look at the investment outcome over a ten year holding period.
| Start date: | 10/10/2012 |
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| End date: | 10/07/2022 | ||||
| Start price/share: | $37.54 | ||||
| End price/share: | $150.29 | ||||
| Starting shares: | 266.38 | ||||
| Ending shares: | 266.38 | ||||
| Dividends reinvested/share: | $0.00 | ||||
| Total return: | 300.35% | ||||
| Average annual return: | 14.88% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $40,020.20 | ||||
The above analysis shows the ten year investment result worked out quite well, with an annualized rate of return of 14.88%. This would have turned a $10K investment made 10 years ago into $40,020.20 today (as of 10/07/2022). On a total return basis, that’s a result of 300.35% (something to think about: how might CRM shares perform over the next 10 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
One more piece of investment wisdom to leave you with:
“Financial peace isn’t the acquisition of stuff. It’s learning to live on less than you make, so you can give money back and have money to invest. You can’t win until you do this.” — Dave Ramsey
