“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 Biogen Inc (NASD: BIIB)? Today, we examine the outcome of a five year investment into the stock back in 2014.
| Start date: | 10/20/2014 |
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| End date: | 10/17/2019 | ||||
| Start price/share: | $311.41 | ||||
| End price/share: | $225.60 | ||||
| Starting shares: | 32.11 | ||||
| Ending shares: | 32.11 | ||||
| Dividends reinvested/share: | $0.00 | ||||
| Total return: | -27.56% | ||||
| Average annual return: | -6.25% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $7,244.53 | ||||
As shown above, the five year investment result worked out poorly, with an annualized rate of return of -6.25%. This would have turned a $10K investment made 5 years ago into $7,244.53 today (as of 10/17/2019). On a total return basis, that’s a result of -27.56% (something to think about: how might BIIB shares perform over the next 5 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
More investment wisdom to ponder:
“Your success in investing will depend in part on your character and guts and in part on your ability to realize, at the height of ebullience and the depth of despair alike, that this too, shall pass.” — Jack Bogle
