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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

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 Huntington Bancshares Inc (NASD: HBAN) back in 2013, bought the stock, ignored the market’s ups and downs, and simply held through to today.

Start date: 09/09/2013


End date: 09/07/2023
Start price/share: $8.57
End price/share: $10.69
Starting shares: 1,166.86
Ending shares: 1,667.64
Dividends reinvested/share: $4.42
Total return: 78.27%
Average annual return: 5.95%
Starting investment: $10,000.00
Ending investment: $17,824.18

The above analysis shows the ten year investment result worked out well, with an annualized rate of return of 5.95%. This would have turned a $10K investment made 10 years ago into $17,824.18 today (as of 09/07/2023). On a total return basis, that’s a result of 78.27% (something to think about: how might HBAN shares perform over the next 10 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]

Notice that Huntington Bancshares Inc paid investors a total of $4.42/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 .62/share, we calculate that HBAN has a current yield of approximately 5.80%. Another interesting datapoint we can examine is ‘yield on cost’ — in other words, we can express the current annualized dividend of .62 against the original $8.57/share purchase price. This works out to a yield on cost of 67.68%.

Here’s one more great investment quote before you go:
“Everyone has the brainpower to make money in stocks. Not everyone has the stomach. If you are susceptible to selling everything in a panic, you ought to avoid stocks and mutual funds altogether.” — Peter Lynch