“Someone’s sitting in the shade today because someone planted a tree a long time ago.”
— 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 twenty year holding period possibly?
Suppose a “buy-and-hold” investor was considering an investment into Waters Corp. (NYSE: WAT) back in 1999: back then, such an investor may have been pondering this very same question. Had they answered “yes” to a full twenty year investment time horizon and then actually held for these past 20 years, here’s how that investment would have turned out.
| Start date: | 04/12/1999 |
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| End date: | 04/11/2019 | ||||
| Start price/share: | $27.46 | ||||
| End price/share: | $250.75 | ||||
| Starting shares: | 364.17 | ||||
| Ending shares: | 364.17 | ||||
| Dividends reinvested/share: | $0.00 | ||||
| Total return: | 813.15% | ||||
| Average annual return: | 11.69% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $91,371.76 | ||||
As shown above, the twenty year investment result worked out quite well, with an annualized rate of return of 11.69%. This would have turned a $10K investment made 20 years ago into $91,371.76 today (as of 04/11/2019). On a total return basis, that’s a result of 813.15% (something to think about: how might WAT shares perform over the next 20 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
One more investment quote to leave you with:
“It’s not whether you’re right or wrong that’s important, but how much money you make when you’re right and how much you lose when you’re wrong.” — George Soros
