“When we own portions of outstanding businesses with outstanding managements, our favorite holding period is forever.”
— 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 Boston Scientific Corp. (NYSE: BSX) back in 2005: 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: | 04/15/2005 |
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| End date: | 04/14/2025 | ||||
| Start price/share: | $29.93 | ||||
| End price/share: | $94.27 | ||||
| Starting shares: | 334.11 | ||||
| Ending shares: | 334.11 | ||||
| Dividends reinvested/share: | $0.00 | ||||
| Total return: | 214.97% | ||||
| Average annual return: | 5.90% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $31,491.40 | ||||
The above analysis shows the two-decade investment result worked out well, with an annualized rate of return of 5.90%. This would have turned a $10K investment made 20 years ago into $31,491.40 today (as of 04/14/2025). On a total return basis, that’s a result of 214.97% (something to think about: how might BSX shares perform over the next 20 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
More investment wisdom to ponder:
“Compound interest is the eighth wonder of the world. He who understands it, earns it; he who doesn’t, pays it.” — Albert Einstein
