Photo credit: commons.wikimedia.org

“I buy on the assumption that they could close the market the next day and not reopen it for five years.”

— Warren Buffett

One of the most important things investors can learn from Warren Buffett, is about how they approach their time horizon for an investment into a stock under consideration. Because immediately after buying shares of a given stock, investors will then be able to check on the day-to-day (and even minute-by-minute) market value. Some days the stock market will be up, other days down. These daily fluctuations can often distract from the long-term view. Today, we look at the result of a five year holding period for an investor who was considering T-Mobile US Inc (NASD: TMUS) back in 2015, bought the stock, ignored the market’s ups and downs, and simply held through to today.

Start date: 01/23/2015
$10,000

01/23/2015
$27,349

01/22/2020
End date: 01/22/2020
Start price/share: $30.16
End price/share: $82.49
Starting shares: 331.56
Ending shares: 331.56
Dividends reinvested/share: $0.00
Total return: 173.51%
Average annual return: 22.29%
Starting investment: $10,000.00
Ending investment: $27,349.84

The above analysis shows the five year investment result worked out exceptionally well, with an annualized rate of return of 22.29%. This would have turned a $10K investment made 5 years ago into $27,349.84 today (as of 01/22/2020). On a total return basis, that’s a result of 173.51% (something to think about: how might TMUS 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:
“The emotional burden of trading is substantial; on any given day, I could lose millions of dollars. If you personalize these losses, you can’t trade.” — Bruce Kovner