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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 Edwards Lifesciences Corp (NYSE: EW) back in 2015: 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: 02/11/2015


End date: 02/10/2020
Start price/share: $65.80
End price/share: $228.44
Starting shares: 151.98
Ending shares: 151.98
Dividends reinvested/share: $0.00
Total return: 247.17%
Average annual return: 28.27%
Starting investment: $10,000.00
Ending investment: $34,723.66

As shown above, the five year investment result worked out exceptionally well, with an annualized rate of return of 28.27%. This would have turned a $10K investment made 5 years ago into $34,723.66 today (as of 02/10/2020). On a total return basis, that’s a result of 247.17% (something to think about: how might EW shares perform over the next 5 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]

One more investment quote to leave you with:
“Behind every stock is a company. Find out what it’s doing.” — Peter Lynch