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

This inspiring quote from Warren Buffett teaches us the importance of considering our investment time horizon when approaching any given investment: Could we envision ourselves holding the stock we are considering for many years? Even a five year holding period potentially?

For “buy-and-hold” investors taking a long-term view, what’s important isn’t the short-term stock market fluctuations that will inevitably occur, but what happens over the long haul. Looking back 5 years to 2014, investors considering an investment into shares of Align Technology Inc (NASD: ALGN) may have been pondering this very question and thinking about their potential investment result over a full five year time horizon. Here’s how that would have worked out.

Start date: 05/27/2014


End date: 05/23/2019
Start price/share: $53.69
End price/share: $307.85
Starting shares: 186.25
Ending shares: 186.25
Dividends reinvested/share: $0.00
Total return: 473.38%
Average annual return: 41.89%
Starting investment: $10,000.00
Ending investment: $57,346.91

As shown above, the five year investment result worked out exceptionally well, with an annualized rate of return of 41.89%. This would have turned a $10K investment made 5 years ago into $57,346.91 today (as of 05/23/2019). On a total return basis, that’s a result of 473.38% (something to think about: how might ALGN shares perform over the next 5 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]

More investment wisdom to ponder:
“Although it’s easy to forget sometimes, a share is not a lottery ticket… it’s part-ownership of a business.” — Peter Lynch