Photo credit:

“I buy on the assumption that they could close the market the next day and not reopen it for five 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 five year holding period possibly?

Suppose a “buy-and-hold” investor was considering an investment into Idexx Laboratories, Inc. (NASD: IDXX) back in 2014: back then, such an investor may have been pondering this very same question. Had they answered “yes” to a full five year investment time horizon and then actually held for these past 5 years, here’s how that investment would have turned out.

Start date: 03/31/2014


End date: 03/28/2019
Start price/share: $60.70
End price/share: $220.56
Starting shares: 164.74
Ending shares: 164.74
Dividends reinvested/share: $0.00
Total return: 263.36%
Average annual return: 29.48%
Starting investment: $10,000.00
Ending investment: $36,341.15

The above analysis shows the five year investment result worked out exceptionally well, with an annualized rate of return of 29.48%. This would have turned a $10K investment made 5 years ago into $36,341.15 today (as of 03/28/2019). On a total return basis, that’s a result of 263.36% (something to think about: how might IDXX shares perform over the next 5 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]

One more investment quote to leave you with:
“Every day that you’re not selling an asset in your portfolio, you’re choosing to buy it.” — Sam Zell