“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 Incyte Corporation (NASD: INCY)? Today, we examine the outcome of a five year investment into the stock back in 2015.
| Start date: | 01/29/2015 |
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| End date: | 01/28/2020 | ||||
| Start price/share: | $81.34 | ||||
| End price/share: | $76.46 | ||||
| Starting shares: | 122.94 | ||||
| Ending shares: | 122.94 | ||||
| Dividends reinvested/share: | $0.00 | ||||
| Total return: | -6.00% | ||||
| Average annual return: | -1.23% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $9,399.94 | ||||
The above analysis shows the five year investment result worked out poorly, with an annualized rate of return of -1.23%. This would have turned a $10K investment made 5 years ago into $9,399.94 today (as of 01/28/2020). On a total return basis, that’s a result of -6.00% (something to think about: how might INCY shares perform over the next 5 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
More investment wisdom to ponder:
“As time goes on, I get more and more convinced that the right method of investment is to put fairly large sums into enterprises which one thinks one knows something about and in the management of which one thoroughly believes.” — John Maynard Keynes
