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

Start date: 08/01/2014
$10,000

08/01/2014
$35,117

07/31/2019
End date: 07/31/2019
Start price/share: $37.81
End price/share: $132.76
Starting shares: 264.48
Ending shares: 264.48
Dividends reinvested/share: $0.00
Total return: 251.12%
Average annual return: 28.56%
Starting investment: $10,000.00
Ending investment: $35,117.96

As shown above, the five year investment result worked out exceptionally well, with an annualized rate of return of 28.56%. This would have turned a $10K investment made 5 years ago into $35,117.96 today (as of 07/31/2019). On a total return basis, that’s a result of 251.12% (something to think about: how might SNPS 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:
“The function of economic forecasting is to make astrology look respectable.” — John Galbraith