“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 decade-long holding period possibly?
Suppose a “buy-and-hold” investor was considering an investment into Ulta Beauty Inc (NASD: ULTA) back in 2016: back then, such an investor may have been pondering this very same question. Had they answered “yes” to a full decade-long investment time horizon and then actually held for these past 10 years, here’s how that investment would have turned out.
| Start date: | 01/27/2016 |
|
|||
| End date: | 01/26/2026 | ||||
| Start price/share: | $173.93 | ||||
| End price/share: | $661.34 | ||||
| Starting shares: | 57.49 | ||||
| Ending shares: | 57.49 | ||||
| Dividends reinvested/share: | $0.00 | ||||
| Total return: | 280.23% | ||||
| Average annual return: | 14.28% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $38,020.69 | ||||
The above analysis shows the decade-long investment result worked out quite well, with an annualized rate of return of 14.28%. This would have turned a $10K investment made 10 years ago into $38,020.69 today (as of 01/26/2026). On a total return basis, that’s a result of 280.23% (something to think about: how might ULTA shares perform over the next 10 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
Another great investment quote to think about:
“Only when the tide goes out do you discover who’s been swimming naked.” — Warren Buffett
