“When we own portions of outstanding businesses with outstanding managements, our favorite holding period is forever.”
— 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 twenty year holding period for an investor who was considering F5 Inc (NASD: FFIV) back in 2003, bought the stock, ignored the market’s ups and downs, and simply held through to today.
| Start date: | 03/17/2003 |
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| End date: | 03/15/2023 | ||||
| Start price/share: | $6.07 | ||||
| End price/share: | $138.54 | ||||
| Starting shares: | 1,647.45 | ||||
| Ending shares: | 1,647.45 | ||||
| Dividends reinvested/share: | $0.00 | ||||
| Total return: | 2,182.37% | ||||
| Average annual return: | 16.92% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $228,112.00 | ||||
The above analysis shows the twenty year investment result worked out exceptionally well, with an annualized rate of return of 16.92%. This would have turned a $10K investment made 20 years ago into $228,112.00 today (as of 03/15/2023). On a total return basis, that’s a result of 2,182.37% (something to think about: how might FFIV shares perform over the next 20 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
One more investment quote to leave you with:
“Markets can remain irrational longer than you can remain solvent.” — John Maynard Keynes
