469 Percent Gain - A Buy-and-Hold Success Story

Here is a true story of how my sister realized a 13.22 percent annualized return from a very conservative long-term investment. In July 1992 she paid $3,665.31 for 250 shares of Magna Bank, a small Midwestern bank. She began to reinvest dividends in 1996.

In 1998 Union Planters bought Magna and she received 255.5 shares of Unions Planters stock for her Magna stock. With dividend reinvestment and stock splits her holdings in Union Planters grew to 510.67 shares by July 2004 at which time Regions Financial (RF) bought Union Planters for a one-for-one stock exchange. The number and value of her RF shares continued to increase through dividend reinvestment and share price increases so as of November 10, 2006 her 559.1 shares of RF were worth $20,848.84, a 469 percent gain based on her original investment.

The lesson from this story is simple - buy a sound investment, reinvest your dividends and hold the investment for a long time.

Related Articles:

Introduction to Buy-and-Hold
Introduction to Dividend Reinvestment

Audio Available:

Posted November 11, 2006.