Photo credit:

“Only buy something that you’d be perfectly happy to hold if the market shut down for 10 years.”

— Warren Buffett

The wisdom of Warren Buffett reflects a value-based philosophy about investing that says investors are buying shares in a business, and encourages strategic thinking about investment time horizon. Before placing a buy order for a stock, a great question we can ask is whether we would still be comfortable making the investment if we couldn’t sell it for many years?

A “buy-and-hold” approach may call for a time horizon that spans a long period of time — maybe even lasting for a ten year holding period. Suppose such a “buy-and-hold” investor had looked into buying shares of Chipotle Mexican Grill Inc (NYSE: CMG) back in 2013. Let’s take a look at how such an investment would have worked out for that buy-and-hold investor:

Start date: 02/07/2013


End date: 02/06/2023
Start price/share: $318.45
End price/share: $1,700.28
Starting shares: 31.40
Ending shares: 31.40
Dividends reinvested/share: $0.00
Total return: 433.92%
Average annual return: 18.23%
Starting investment: $10,000.00
Ending investment: $53,392.00

As shown above, the ten year investment result worked out exceptionally well, with an annualized rate of return of 18.23%. This would have turned a $10K investment made 10 years ago into $53,392.00 today (as of 02/06/2023). On a total return basis, that’s a result of 433.92% (something to think about: how might CMG 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:
“If you’re looking for a home run, a great investment for five years or 10 years or more, then the only way to beat this enormous fog that covers the future is to identify a long-term trend that will give a particular business some sort of edge.” — Ralph Wanger