“Someone’s sitting in the shade today because someone planted a tree a long time ago.”
— Warren Buffett
This inspiring quote from Warren Buffett teaches us the importance of considering our investment time horizon when approaching any given investment: Could we envision ourselves holding the stock we are considering for many years? Even a two-decade holding period potentially?
For “buy-and-hold” investors taking a long-term view, what’s important isn’t the short-term stock market fluctuations that will inevitably occur, but what happens over the long haul. Looking back 20 years to 2003, investors considering an investment into shares of Mettler-Toledo International, Inc. (NYSE: MTD) may have been pondering this very question and thinking about their potential investment result over a full two-decade time horizon. Here’s how that would have worked out.
| Start date: | 10/20/2003 |
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| End date: | 10/18/2023 | ||||
| Start price/share: | $38.15 | ||||
| End price/share: | $1,010.00 | ||||
| Starting shares: | 262.12 | ||||
| Ending shares: | 262.12 | ||||
| Dividends reinvested/share: | $0.00 | ||||
| Total return: | 2,547.44% | ||||
| Average annual return: | 17.79% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $264,699.36 | ||||
The above analysis shows the two-decade investment result worked out exceptionally well, with an annualized rate of return of 17.79%. This would have turned a $10K investment made 20 years ago into $264,699.36 today (as of 10/18/2023). On a total return basis, that’s a result of 2,547.44% (something to think about: how might MTD shares perform over the next 20 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
Another great investment quote to think about:
“If you are not willing to own a stock for 10 years, do not even think about owning it for 10 minutes.” — Warren Buffett
