“Only buy something that you’d be perfectly happy to hold if the market shut down for 10 years.”
— Warren Buffett
The wisdom of Warren Buffett reflects a value-based philosophy about investing that says investors are buying shares in a business, and encourages strategic thinking about investment time horizon. Before placing a buy order for a stock, a great question we can ask is whether we would still be comfortable making the investment if we couldn’t sell it for many years?
A “buy-and-hold” approach may call for a time horizon that spans a long period of time — maybe even lasting for a ten year holding period. Suppose such a “buy-and-hold” investor had looked into buying shares of UnitedHealth Group Inc (NYSE: UNH) back in 2015. Let’s take a look at how such an investment would have worked out for that buy-and-hold investor:
| Start date: | 08/28/2015 |
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| End date: | 08/27/2025 | ||||
| Start price/share: | $117.28 | ||||
| End price/share: | $303.88 | ||||
| Starting shares: | 85.27 | ||||
| Ending shares: | 99.61 | ||||
| Dividends reinvested/share: | $50.45 | ||||
| Total return: | 202.70% | ||||
| Average annual return: | 11.71% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $30,281.96 | ||||
As shown above, the ten year investment result worked out quite well, with an annualized rate of return of 11.71%. This would have turned a $10K investment made 10 years ago into $30,281.96 today (as of 08/27/2025). On a total return basis, that’s a result of 202.70% (something to think about: how might UNH shares perform over the next 10 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
Notice that UnitedHealth Group Inc paid investors a total of $50.45/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 8.84/share, we calculate that UNH has a current yield of approximately 2.91%. Another interesting datapoint we can examine is ‘yield on cost’ — in other words, we can express the current annualized dividend of 8.84 against the original $117.28/share purchase price. This works out to a yield on cost of 2.48%.
One more investment quote to leave you with:
“Go for a business that any idiot can run – because sooner or later, any idiot probably is going to run it.” — Peter Lynch
