“Someone’s sitting in the shade today because someone planted a tree a long time ago.”
— Warren Buffett
The above quote from Warren Buffett is timeless, and brings into focus the choice about time horizon that any investor should think about before buying a stock they are considering. Behind every stock is an actual business; what will that business look like over a twenty year period?
Today, let’s look backwards in time to 2003, and take a look at what happened to investors who asked that very question about Edwards Lifesciences Corp (NYSE: EW), by taking a look at the investment outcome over a twenty year holding period.
| Start date: | 12/22/2003 |
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| End date: | 12/21/2023 | ||||
| Start price/share: | $2.45 | ||||
| End price/share: | $74.95 | ||||
| Starting shares: | 4,081.63 | ||||
| Ending shares: | 4,081.63 | ||||
| Dividends reinvested/share: | $0.00 | ||||
| Total return: | 2,959.18% | ||||
| Average annual return: | 18.64% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $305,799.13 | ||||
As we can see, the twenty year investment result worked out exceptionally well, with an annualized rate of return of 18.64%. This would have turned a $10K investment made 20 years ago into $305,799.13 today (as of 12/21/2023). On a total return basis, that’s a result of 2,959.18% (something to think about: how might EW shares perform over the next 20 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
One more investment quote to leave you with:
“It’s not whether you’re right or wrong that’s important, but how much money you make when you’re right and how much you lose when you’re wrong.” — George Soros
