“I buy on the assumption that they could close the market the next day and not reopen it for five years.”
— Warren Buffett
The Warren Buffett investment philosophy calls for a long-term investment horizon, where a five year holding period, or even longer, would fit right into the strategy. How would such a strategy have worked out for an investment into Electronic Arts, Inc. (NASD: EA)? Today, we examine the outcome of a five year investment into the stock back in 2014.
| Start date: | 06/30/2014 |
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| End date: | 06/27/2019 | ||||
| Start price/share: | $35.87 | ||||
| End price/share: | $99.14 | ||||
| Starting shares: | 278.78 | ||||
| Ending shares: | 278.78 | ||||
| Dividends reinvested/share: | $0.00 | ||||
| Total return: | 176.39% | ||||
| Average annual return: | 22.57% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $27,633.55 | ||||
As shown above, the five year investment result worked out exceptionally well, with an annualized rate of return of 22.57%. This would have turned a $10K investment made 5 years ago into $27,633.55 today (as of 06/27/2019). On a total return basis, that’s a result of 176.39% (something to think about: how might EA shares perform over the next 5 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
One more piece of investment wisdom to leave you with:
“Financial peace isn’t the acquisition of stuff. It’s learning to live on less than you make, so you can give money back and have money to invest. You can’t win until you do this.” — Dave Ramsey
