“Only buy something that you’d be perfectly happy to hold if the market shut down for 10 years.”
— Warren Buffett
The above quote from Warren Buffett is timeless, and brings into focus the choice about time horizon that any investor should think about before buying a stock they are considering. Behind every stock is an actual business; what will that business look like over a ten year period?
Today, let’s look backwards in time to 2014, and take a look at what happened to investors who asked that very question about Trimble Inc (NASD: TRMB), by taking a look at the investment outcome over a ten year holding period.
| Start date: | 08/04/2014 |
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| End date: | 08/01/2024 | ||||
| Start price/share: | $31.37 | ||||
| End price/share: | $52.51 | ||||
| Starting shares: | 318.78 | ||||
| Ending shares: | 318.78 | ||||
| Dividends reinvested/share: | $0.00 | ||||
| Total return: | 67.39% | ||||
| Average annual return: | 5.29% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $16,744.46 | ||||
As shown above, the ten year investment result worked out well, with an annualized rate of return of 5.29%. This would have turned a $10K investment made 10 years ago into $16,744.46 today (as of 08/01/2024). On a total return basis, that’s a result of 67.39% (something to think about: how might TRMB 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:
“You get recessions, you have stock market declines. If you don’t understand that’s going to happen, then you’re not ready, you won’t do well in the markets.” — Peter Lynch
