“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 decade-long holding period for an investor who was considering Verisign Inc (NASD: VRSN) back in 2012, bought the stock, ignored the market’s ups and downs, and simply held through to today.
| Start date: | 08/30/2012 |
|
|||
| End date: | 08/29/2022 | ||||
| Start price/share: | $47.20 | ||||
| End price/share: | $184.08 | ||||
| Starting shares: | 211.86 | ||||
| Ending shares: | 211.86 | ||||
| Dividends reinvested/share: | $0.00 | ||||
| Total return: | 290.00% | ||||
| Average annual return: | 14.58% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $39,016.66 | ||||
As we can see, the decade-long investment result worked out quite well, with an annualized rate of return of 14.58%. This would have turned a $10K investment made 10 years ago into $39,016.66 today (as of 08/29/2022). On a total return basis, that’s a result of 290.00% (something to think about: how might VRSN shares perform over the next 10 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
Here’s one more great investment quote before you go:
“Every day that you’re not selling an asset in your portfolio, you’re choosing to buy it.” — Sam Zell
