“When we own portions of outstanding businesses with outstanding managements, our favorite holding period is forever.”
— 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 Advanced Micro Devices Inc (NASD: AMD) back in 2005, bought the stock, ignored the market’s ups and downs, and simply held through to today.
| Start date: | 04/14/2005 |
|
|||
| End date: | 04/11/2025 | ||||
| Start price/share: | $16.26 | ||||
| End price/share: | $93.40 | ||||
| Starting shares: | 615.01 | ||||
| Ending shares: | 615.01 | ||||
| Dividends reinvested/share: | $0.00 | ||||
| Total return: | 474.42% | ||||
| Average annual return: | 9.13% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $57,423.68 | ||||
As we can see, the two-decade investment result worked out well, with an annualized rate of return of 9.13%. This would have turned a $10K investment made 20 years ago into $57,423.68 today (as of 04/11/2025). On a total return basis, that’s a result of 474.42% (something to think about: how might AMD 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:
“If investing is entertaining, if you’re having fun, you’re probably not making any money. Good investing is boring.” — George Soros
