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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 AutoZone, Inc. (NYSE: AZO) 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: 03/11/2004


End date: 03/08/2024
Start price/share: $82.75
End price/share: $3,079.49
Starting shares: 120.85
Ending shares: 120.85
Dividends reinvested/share: $0.00
Total return: 3,621.44%
Average annual return: 19.82%
Starting investment: $10,000.00
Ending investment: $372,405.94

As shown above, the twenty year investment result worked out exceptionally well, with an annualized rate of return of 19.82%. This would have turned a $10K investment made 20 years ago into $372,405.94 today (as of 03/08/2024). On a total return basis, that’s a result of 3,621.44% (something to think about: how might AZO 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:
“The emotional burden of trading is substantial; on any given day, I could lose millions of dollars. If you personalize these losses, you can’t trade.” — Bruce Kovner