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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 Intuitive Surgical Inc (NASD: ISRG) 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: 07/21/2014
$10,000

07/21/2014
$41,410

07/18/2019
End date: 07/18/2019
Start price/share: $129.57
End price/share: $536.63
Starting shares: 77.18
Ending shares: 77.18
Dividends reinvested/share: $0.00
Total return: 314.16%
Average annual return: 32.91%
Starting investment: $10,000.00
Ending investment: $41,410.58

As shown above, the five year investment result worked out exceptionally well, with an annualized rate of return of 32.91%. This would have turned a $10K investment made 5 years ago into $41,410.58 today (as of 07/18/2019). On a total return basis, that’s a result of 314.16% (something to think about: how might ISRG 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:
“Money is better than poverty, if only for financial reasons.” — Woody Allen