“Only buy something that you’d be perfectly happy to hold if the market shut down for 10 years.”
— Warren Buffett
The Warren Buffett investment philosophy calls for a longterm investment horizon, where a ten year holding period, or even longer, would fit right into the strategy. How would such a strategy have worked out for an investment into Boston Properties Inc (NYSE: BXP)? Today, we examine the outcome of a ten year investment into the stock back in 2014.
Start date:  04/25/2014 


End date:  04/24/2024  
Start price/share:  $117.37  
End price/share:  $62.94  
Starting shares:  85.20  
Ending shares:  125.63  
Dividends reinvested/share:  $40.04  
Total return:  20.93%  
Average annual return:  2.32%  
Starting investment:  $10,000.00  
Ending investment:  $7,906.80 
As we can see, the ten year investment result worked out poorly, with an annualized rate of return of 2.32%. This would have turned a $10K investment made 10 years ago into $7,906.80 today (as of 04/24/2024). On a total return basis, that’s a result of 20.93% (something to think about: how might BXP shares perform over the next 10 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
Notice that Boston Properties Inc paid investors a total of $40.04/share in dividends over the 10 holding period, marking a second component of the total return beyond share price change alone. Much like watering a tree, reinvesting dividends can help an investment to grow over time — for the above calculations we assume dividend reinvestment (and for this exercise the closing price on exdate is used for the reinvestment of a given dividend).
Based upon the most recent annualized dividend rate of 3.92/share, we calculate that BXP has a current yield of approximately 6.23%. Another interesting datapoint we can examine is ‘yield on cost’ — in other words, we can express the current annualized dividend of 3.92 against the original $117.37/share purchase price. This works out to a yield on cost of 5.31%.
Another great investment quote to think about:
“It’s not how much money you make, but how much money you keep.” — Robert Kiyosaki