“Only buy something that you’d be perfectly happy to hold if the market shut down for 10 years.”
— Warren Buffett
This inspiring quote from Warren Buffett teaches us the importance of considering our investment time horizon when approaching any given investment: Could we envision ourselves holding the stock we are considering for many years? Even a ten year holding period potentially?
For “buy-and-hold” investors taking a long-term view, what’s important isn’t the short-term stock market fluctuations that will inevitably occur, but what happens over the long haul. Looking back 10 years to 2011, investors considering an investment into shares of Take-Two Interactive Software, Inc. (NASD: TTWO) may have been pondering this very question and thinking about their potential investment result over a full ten year time horizon. Here’s how that would have worked out.
| Start date: | 10/27/2011 |
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| End date: | 10/26/2021 | ||||
| Start price/share: | $15.80 | ||||
| End price/share: | $182.54 | ||||
| Starting shares: | 632.91 | ||||
| Ending shares: | 632.91 | ||||
| Dividends reinvested/share: | $0.00 | ||||
| Total return: | 1,055.32% | ||||
| Average annual return: | 27.71% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $115,566.27 | ||||
As shown above, the ten year investment result worked out exceptionally well, with an annualized rate of return of 27.71%. This would have turned a $10K investment made 10 years ago into $115,566.27 today (as of 10/26/2021). On a total return basis, that’s a result of 1,055.32% (something to think about: how might TTWO shares perform over the next 10 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
One more investment quote to leave you with:
“Cash combined with courage in a time of crisis is priceless.” — Warren Buffett
