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“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 Boston Scientific Corp. (NYSE: BSX) 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: 05/22/2014
$10,000

05/22/2014
$29,732

05/21/2019
End date: 05/21/2019
Start price/share: $12.68
End price/share: $37.70
Starting shares: 788.64
Ending shares: 788.64
Dividends reinvested/share: $0.00
Total return: 197.32%
Average annual return: 24.35%
Starting investment: $10,000.00
Ending investment: $29,732.33

As we can see, the five year investment result worked out exceptionally well, with an annualized rate of return of 24.35%. This would have turned a $10K investment made 5 years ago into $29,732.33 today (as of 05/21/2019). On a total return basis, that’s a result of 197.32% (something to think about: how might BSX 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:
“Most investors want to do today what they should have done yesterday.” — Larry Summers