“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 Autodesk Inc (NASD: ADSK) back in 2013, bought the stock, ignored the market’s ups and downs, and simply held through to today.
| Start date: | 06/10/2013 |
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| End date: | 06/07/2023 | ||||
| Start price/share: | $35.97 | ||||
| End price/share: | $201.16 | ||||
| Starting shares: | 278.01 | ||||
| Ending shares: | 278.01 | ||||
| Dividends reinvested/share: | $0.00 | ||||
| Total return: | 459.24% | ||||
| Average annual return: | 18.79% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $55,923.45 | ||||
The above analysis shows the ten year investment result worked out exceptionally well, with an annualized rate of return of 18.79%. This would have turned a $10K investment made 10 years ago into $55,923.45 today (as of 06/07/2023). On a total return basis, that’s a result of 459.24% (something to think about: how might ADSK shares perform over the next 10 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
One more investment quote to leave you with:
“Value investing requires a great deal of hard work, unusually strict discipline, and a long-term investment horizon. Few are willing and able to devote sufficient time and effort to become value investors, and only a fraction of those have the proper mind-set to succeed.” — Seth Klarman
