“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 Intel Corp (NASD: INTC) back in 2016: 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: | 03/02/2016 |
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| End date: | 02/27/2026 | ||||
| Start price/share: | $30.54 | ||||
| End price/share: | $45.61 | ||||
| Starting shares: | 327.44 | ||||
| Ending shares: | 410.62 | ||||
| Dividends reinvested/share: | $9.61 | ||||
| Total return: | 87.29% | ||||
| Average annual return: | 6.48% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $18,732.93 | ||||
As shown above, the ten year investment result worked out well, with an annualized rate of return of 6.48%. This would have turned a $10K investment made 10 years ago into $18,732.93 today (as of 02/27/2026). On a total return basis, that’s a result of 87.29% (something to think about: how might INTC shares perform over the next 10 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
Notice that Intel Corp paid investors a total of $9.61/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 .5/share, we calculate that INTC has a current yield of approximately 1.10%. Another interesting datapoint we can examine is ‘yield on cost’ — in other words, we can express the current annualized dividend of .5 against the original $30.54/share purchase price. This works out to a yield on cost of 3.60%.
Another great investment quote to think about:
“Nearly every time I strayed from the herd, I’ve made a lot of money. Wandering away from the action is the way to find the new action.” — Jim Rogers
