“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 O’Reilly Automotive, Inc. (NASD: ORLY) back in 2015: 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: | 03/05/2015 |
|
|||
| End date: | 03/04/2025 | ||||
| Start price/share: | $208.02 | ||||
| End price/share: | $1,356.77 | ||||
| Starting shares: | 48.07 | ||||
| Ending shares: | 48.07 | ||||
| Dividends reinvested/share: | $0.00 | ||||
| Total return: | 552.23% | ||||
| Average annual return: | 20.61% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $65,204.73 | ||||
The above analysis shows the ten year investment result worked out exceptionally well, with an annualized rate of return of 20.61%. This would have turned a $10K investment made 10 years ago into $65,204.73 today (as of 03/04/2025). On a total return basis, that’s a result of 552.23% (something to think about: how might ORLY shares perform over the next 10 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
One more piece of investment wisdom to leave you with:
“People who invest make money for themselves; people who speculate make money for their brokers.” — Benjamin Graham
