“When we own portions of outstanding businesses with outstanding managements, our favorite holding period is forever.”
— 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 two-decade holding period possibly?
Suppose a “buy-and-hold” investor was considering an investment into Simon Property Group, Inc. (NYSE: SPG) back in 2006: back then, such an investor may have been pondering this very same question. Had they answered “yes” to a full two-decade investment time horizon and then actually held for these past 20 years, here’s how that investment would have turned out.
| Start date: | 02/03/2006 |
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| End date: | 02/02/2026 | ||||
| Start price/share: | $75.65 | ||||
| End price/share: | $191.22 | ||||
| Starting shares: | 132.19 | ||||
| Ending shares: | 306.44 | ||||
| Dividends reinvested/share: | $108.62 | ||||
| Total return: | 485.98% | ||||
| Average annual return: | 9.24% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $58,621.17 | ||||
As we can see, the two-decade investment result worked out well, with an annualized rate of return of 9.24%. This would have turned a $10K investment made 20 years ago into $58,621.17 today (as of 02/02/2026). On a total return basis, that’s a result of 485.98% (something to think about: how might SPG shares perform over the next 20 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
Notice that Simon Property Group, Inc. paid investors a total of $108.62/share in dividends over the 20 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 8.8/share, we calculate that SPG has a current yield of approximately 4.60%. Another interesting datapoint we can examine is ‘yield on cost’ — in other words, we can express the current annualized dividend of 8.8 against the original $75.65/share purchase price. This works out to a yield on cost of 6.08%.
More investment wisdom to ponder:
“If you have more than 120 or 130 I.Q. points, you can afford to give the rest away. You don’t need extraordinary intelligence to succeed as an investor.” — Warren Buffett
