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“Only buy something that you’d be perfectly happy to hold if the market shut down for 10 years.”

— 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 ten year holding period possibly?

Suppose a “buy-and-hold” investor was considering an investment into Alphabet Inc (NASD: GOOGL) back in 2014: back then, such an investor may have been pondering this very same question. Had they answered “yes” to a full ten year investment time horizon and then actually held for these past 10 years, here’s how that investment would have turned out.

Start date: 05/07/2014


End date: 05/06/2024
Start price/share: $25.90
End price/share: $168.10
Starting shares: 386.10
Ending shares: 386.10
Dividends reinvested/share: $0.00
Total return: 549.03%
Average annual return: 20.55%
Starting investment: $10,000.00
Ending investment: $64,880.90

As shown above, the ten year investment result worked out exceptionally well, with an annualized rate of return of 20.55%. This would have turned a $10K investment made 10 years ago into $64,880.90 today (as of 05/06/2024). On a total return basis, that’s a result of 549.03% (something to think about: how might GOOGL shares perform over the next 10 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]

More investment wisdom to ponder:
“When the public is most frightened, only the strong are left, and that’s when the market is in the best possible hands.” — Victor Niederhoffer