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 decade-long holding period. Suppose such a “buy-and-hold” investor had looked into buying shares of AutoZone, Inc. (NYSE: AZO) 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: 04/12/2013


End date: 04/11/2023
Start price/share: $393.57
End price/share: $2,559.54
Starting shares: 25.41
Ending shares: 25.41
Dividends reinvested/share: $0.00
Total return: 550.34%
Average annual return: 20.58%
Starting investment: $10,000.00
Ending investment: $65,009.30

As shown above, the decade-long investment result worked out exceptionally well, with an annualized rate of return of 20.58%. This would have turned a $10K investment made 10 years ago into $65,009.30 today (as of 04/11/2023). On a total return basis, that’s a result of 550.34% (something to think about: how might AZO 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:
“Investors should purchase stocks like they purchase groceries, not like they purchase perfume.” — Benjamin Graham