“Only buy something that you’d be perfectly happy to hold if the market shut down for 10 years.”
— 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 ten year holding period for an investor who was considering Consolidated Edison Inc (NYSE: ED) back in 2015, bought the stock, ignored the market’s ups and downs, and simply held through to today.
| Start date: | 08/11/2015 |
|
|||
| End date: | 08/08/2025 | ||||
| Start price/share: | $65.85 | ||||
| End price/share: | $104.48 | ||||
| Starting shares: | 151.86 | ||||
| Ending shares: | 218.61 | ||||
| Dividends reinvested/share: | $30.14 | ||||
| Total return: | 128.40% | ||||
| Average annual return: | 8.61% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $22,840.11 | ||||
As shown above, the ten year investment result worked out well, with an annualized rate of return of 8.61%. This would have turned a $10K investment made 10 years ago into $22,840.11 today (as of 08/08/2025). On a total return basis, that’s a result of 128.40% (something to think about: how might ED shares perform over the next 10 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
Notice that Consolidated Edison Inc paid investors a total of $30.14/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 ex-date is used for the reinvestment of a given dividend).
Based upon the most recent annualized dividend rate of 3.4/share, we calculate that ED has a current yield of approximately 3.25%. Another interesting datapoint we can examine is ‘yield on cost’ — in other words, we can express the current annualized dividend of 3.4 against the original $65.85/share purchase price. This works out to a yield on cost of 4.94%.
More investment wisdom to ponder:
“Be fearful when others are greedy; be greedy when others are fearful.” — Warren Buffett
