“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 ten year holding period for an investor who was considering Meta Platforms Inc (NASD: META) back in 2012, bought the stock, ignored the market’s ups and downs, and simply held through to today.
| Start date: | 12/06/2012 |
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| End date: | 12/05/2022 | ||||
| Start price/share: | $26.97 | ||||
| End price/share: | $122.43 | ||||
| Starting shares: | 370.78 | ||||
| Ending shares: | 370.78 | ||||
| Dividends reinvested/share: | $0.00 | ||||
| Total return: | 353.95% | ||||
| Average annual return: | 16.33% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $45,404.33 | ||||
As we can see, the ten year investment result worked out exceptionally well, with an annualized rate of return of 16.33%. This would have turned a $10K investment made 10 years ago into $45,404.33 today (as of 12/05/2022). On a total return basis, that’s a result of 353.95% (something to think about: how might META shares perform over the next 10 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
Here’s one more great investment quote before you go:
“A stock is not just a ticker symbol or an electronic blip; it is an ownership interest in an actual business, with an underlying value that does not depend on its share price.” — Benjamin Graham
