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“Someone’s sitting in the shade today because someone planted a tree a long time ago.”

— Warren Buffett

Investors can learn a lot from Warren Buffett, whose above quote teaches the importance of thinking about investment time horizon, and asking ourselves before buying any given stock: can we envision holding onto it for years — even a twenty year holding period possibly?

Suppose a “buy-and-hold” investor was considering an investment into CBRE Group Inc (NYSE: CBRE) back in 2004: back then, such an investor may have been pondering this very same question. Had they answered “yes” to a full twenty year investment time horizon and then actually held for these past 20 years, here’s how that investment would have turned out.

Start date: 06/10/2004


End date: 03/11/2024
Start price/share: $18.35
End price/share: $93.45
Starting shares: 544.96
Ending shares: 544.96
Dividends reinvested/share: $0.00
Total return: 409.26%
Average annual return: 8.58%
Starting investment: $10,000.00
Ending investment: $50,883.09

As shown above, the twenty year investment result worked out well, with an annualized rate of return of 8.58%. This would have turned a $10K investment made 20 years ago into $50,883.09 today (as of 03/11/2024). On a total return basis, that’s a result of 409.26% (something to think about: how might CBRE 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:
“Compound interest is the eighth wonder of the world. He who understands it, earns it; he who doesn’t, pays it.” — Albert Einstein