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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

The above quote from Warren Buffett is timeless, and brings into focus the choice about time horizon that any investor should think about before buying a stock they are considering. Behind every stock is an actual business; what will that business look like over a five year period?

Today, let’s look backwards in time to 2014, and take a look at what happened to investors who asked that very question about Micron Technology Inc. (NASD: MU), by taking a look at the investment outcome over a five year holding period.

Start date: 05/19/2014


End date: 05/16/2019
Start price/share: $26.94
End price/share: $37.31
Starting shares: 371.20
Ending shares: 371.20
Dividends reinvested/share: $0.00
Total return: 38.49%
Average annual return: 6.74%
Starting investment: $10,000.00
Ending investment: $13,850.99

The above analysis shows the five year investment result worked out well, with an annualized rate of return of 6.74%. This would have turned a $10K investment made 5 years ago into $13,850.99 today (as of 05/16/2019). On a total return basis, that’s a result of 38.49% (something to think about: how might MU shares perform over the next 5 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]

Here’s one more great investment quote before you go:
“Our job is to find a few intelligent things to do, not to keep up with every damn thing in the world.” — Charlie Munger