“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 2015, investors considering an investment into shares of T-Mobile US Inc (NASD: TMUS) 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: | 07/23/2015 |
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| End date: | 07/22/2025 | ||||
| Start price/share: | $37.93 | ||||
| End price/share: | $233.25 | ||||
| Starting shares: | 263.64 | ||||
| Ending shares: | 270.51 | ||||
| Dividends reinvested/share: | $5.24 | ||||
| Total return: | 530.96% | ||||
| Average annual return: | 20.21% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $63,073.07 | ||||
As shown above, the ten year investment result worked out exceptionally well, with an annualized rate of return of 20.21%. This would have turned a $10K investment made 10 years ago into $63,073.07 today (as of 07/22/2025). On a total return basis, that’s a result of 530.96% (something to think about: how might TMUS shares perform over the next 10 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
Notice that T-Mobile US Inc paid investors a total of $5.24/share in dividends over the 10 holding period, marking a second component of the total return beyond share price change alone. Much like watering a tree, reinvesting dividends can help an investment to grow over time — for the above calculations we assume dividend reinvestment (and for this exercise the closing price on ex-date is used for the reinvestment of a given dividend).
Based upon the most recent annualized dividend rate of 3.52/share, we calculate that TMUS has a current yield of approximately 1.51%. Another interesting datapoint we can examine is ‘yield on cost’ — in other words, we can express the current annualized dividend of 3.52 against the original $37.93/share purchase price. This works out to a yield on cost of 3.98%.
One more investment quote to leave you with:
“If a speculator is correct half of the time, he is hitting a good average. Even being right 3 or 4 times out of 10 should yield a person a fortune if he has the sense to cut his losses quickly on the ventures where he is wrong.” — Bernard Baruch
