“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 Amazon.com Inc (NASD: AMZN) back in 2013, bought the stock, ignored the market’s ups and downs, and simply held through to today.
| Start date: | 05/17/2013 |
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| End date: | 05/16/2023 | ||||
| Start price/share: | $13.50 | ||||
| End price/share: | $113.40 | ||||
| Starting shares: | 740.74 | ||||
| Ending shares: | 740.74 | ||||
| Dividends reinvested/share: | $0.00 | ||||
| Total return: | 740.00% | ||||
| Average annual return: | 23.71% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $84,004.24 | ||||
As we can see, the ten year investment result worked out exceptionally well, with an annualized rate of return of 23.71%. This would have turned a $10K investment made 10 years ago into $84,004.24 today (as of 05/16/2023). On a total return basis, that’s a result of 740.00% (something to think about: how might AMZN 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:
“You’ve got to be careful if you don’t know where you’re going, ’cause you might not get there.” — Yogi Berra
