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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 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 Alexion Pharmaceuticals Inc. (NASD: ALXN)? Today, we examine the outcome of a five year investment into the stock back in 2014.

Start date: 07/11/2014


End date: 07/10/2019
Start price/share: $163.21
End price/share: $124.37
Starting shares: 61.27
Ending shares: 61.27
Dividends reinvested/share: $0.00
Total return: -23.80%
Average annual return: -5.29%
Starting investment: $10,000.00
Ending investment: $7,620.42

As shown above, the five year investment result worked out poorly, with an annualized rate of return of -5.29%. This would have turned a $10K investment made 5 years ago into $7,620.42 today (as of 07/10/2019). On a total return basis, that’s a result of -23.80% (something to think about: how might ALXN shares perform over the next 5 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]

Another great investment quote to think about:
“Nearly every time I strayed from the herd, I’ve made a lot of money. Wandering away from the action is the way to find the new action.” — Jim Rogers