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

— Warren Buffett

The Warren Buffett investment philosophy calls for a long-term investment horizon, where a decade-long holding period, or even longer, would fit right into the strategy. How would such a strategy have worked out for an investment into General Electric Co (NYSE: GE)? Today, we examine the outcome of a decade-long investment into the stock back in 2013.

Start date: 09/03/2013


End date: 08/30/2023
Start price/share: $138.45
End price/share: $114.31
Starting shares: 72.23
Ending shares: 87.69
Dividends reinvested/share: $27.34
Total return: 0.24%
Average annual return: 0.02%
Starting investment: $10,000.00
Ending investment: $10,020.01

As shown above, the decade-long investment result worked out as follows, with an annualized rate of return of 0.02%. This would have turned a $10K investment made 10 years ago into $10,020.01 today (as of 08/30/2023). On a total return basis, that’s a result of 0.24% (something to think about: how might GE shares perform over the next 10 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]

Notice that General Electric Co paid investors a total of $27.34/share in dividends over the 10 holding period, marking a second component of the total return beyond share price change alone. Much like watering a tree, reinvesting dividends can help an investment to grow over time — for the above calculations we assume dividend reinvestment (and for this exercise the closing price on ex-date is used for the reinvestment of a given dividend).

Based upon the most recent annualized dividend rate of .32/share, we calculate that GE has a current yield of approximately 0.28%. Another interesting datapoint we can examine is ‘yield on cost’ — in other words, we can express the current annualized dividend of .32 against the original $138.45/share purchase price. This works out to a yield on cost of 0.20%.

More investment wisdom to ponder:
“Cash is a fact, profit is an opinion.” — Alfred Rappaport