“Someone’s sitting in the shade today because someone planted a tree a long time ago.”
— 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 two-decade holding period for an investor who was considering Edwards Lifesciences Corp (NYSE: EW) back in 2004, bought the stock, ignored the market’s ups and downs, and simply held through to today.
| Start date: | 04/19/2004 |
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| End date: | 04/18/2024 | ||||
| Start price/share: | $2.79 | ||||
| End price/share: | $86.45 | ||||
| Starting shares: | 3,584.23 | ||||
| Ending shares: | 3,584.23 | ||||
| Dividends reinvested/share: | $0.00 | ||||
| Total return: | 2,998.57% | ||||
| Average annual return: | 18.72% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $309,952.01 | ||||
The above analysis shows the two-decade investment result worked out exceptionally well, with an annualized rate of return of 18.72%. This would have turned a $10K investment made 20 years ago into $309,952.01 today (as of 04/18/2024). On a total return basis, that’s a result of 2,998.57% (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.]
More investment wisdom to ponder:
“A market downturn doesn’t bother us. It is an opportunity to increase our ownership of great companies with great management at good prices.” — Warren Buffett
