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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 two-decade holding period possibly?

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

Start date: 04/12/2004


End date: 04/10/2024
Start price/share: $21.19
End price/share: $377.15
Starting shares: 471.92
Ending shares: 471.92
Dividends reinvested/share: $0.00
Total return: 1,679.85%
Average annual return: 15.48%
Starting investment: $10,000.00
Ending investment: $178,093.99

The above analysis shows the two-decade investment result worked out exceptionally well, with an annualized rate of return of 15.48%. This would have turned a $10K investment made 20 years ago into $178,093.99 today (as of 04/10/2024). On a total return basis, that’s a result of 1,679.85% (something to think about: how might MOH shares perform over the next 20 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]

Here’s one more great investment quote before you go:
“Opportunities come infrequently. When it rains gold, put out the bucket, not the thimble.” — Warren Buffett