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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

Investors can learn a lot from Warren Buffett, whose above quote teaches the importance of thinking about investment time horizon, and asking ourselves before buying any given stock: can we envision holding onto it for years — even a ten year holding period possibly?

Suppose a “buy-and-hold” investor was considering an investment into Adobe Inc (NASD: ADBE) back in 2012: back then, such an investor may have been pondering this very same question. Had they answered “yes” to a full ten year investment time horizon and then actually held for these past 10 years, here’s how that investment would have turned out.

Start date: 10/26/2012


End date: 10/25/2022
Start price/share: $34.01
End price/share: $323.79
Starting shares: 294.03
Ending shares: 294.03
Dividends reinvested/share: $0.00
Total return: 852.04%
Average annual return: 25.27%
Starting investment: $10,000.00
Ending investment: $95,222.34

As we can see, the ten year investment result worked out exceptionally well, with an annualized rate of return of 25.27%. This would have turned a $10K investment made 10 years ago into $95,222.34 today (as of 10/25/2022). On a total return basis, that’s a result of 852.04% (something to think about: how might ADBE 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:
“Cash combined with courage in a time of crisis is priceless.” — Warren Buffett