“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 Akamai Technologies Inc (NASD: AKAM) back in 2013, bought the stock, ignored the market’s ups and downs, and simply held through to today.
| Start date: | 12/27/2013 |
|
|||
| End date: | 12/26/2023 | ||||
| Start price/share: | $46.88 | ||||
| End price/share: | $119.48 | ||||
| Starting shares: | 213.31 | ||||
| Ending shares: | 213.31 | ||||
| Dividends reinvested/share: | $0.00 | ||||
| Total return: | 154.86% | ||||
| Average annual return: | 9.80% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $25,476.20 | ||||
The above analysis shows the ten year investment result worked out well, with an annualized rate of return of 9.80%. This would have turned a $10K investment made 10 years ago into $25,476.20 today (as of 12/26/2023). On a total return basis, that’s a result of 154.86% (something to think about: how might AKAM shares perform over the next 10 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
More investment wisdom to ponder:
“The whole secret to winning big in the stock market is not to be right all the time, but to lose the least amount possible when you’re wrong.” — William O’Neil
