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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

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 Advanced Micro Devices Inc (NASD: AMD) back in 2015, bought the stock, ignored the market’s ups and downs, and simply held through to today.

Start date: 04/02/2015
$10,000

04/02/2015
$162,325

04/01/2020
End date: 04/01/2020
Start price/share: $2.69
End price/share: $43.66
Starting shares: 3,717.47
Ending shares: 3,717.47
Dividends reinvested/share: $0.00
Total return: 1,523.05%
Average annual return: 74.56%
Starting investment: $10,000.00
Ending investment: $162,325.42

As shown above, the five year investment result worked out exceptionally well, with an annualized rate of return of 74.56%. This would have turned a $10K investment made 5 years ago into $162,325.42 today (as of 04/01/2020). On a total return basis, that’s a result of 1,523.05% (something to think about: how might AMD shares perform over the next 5 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]

More investment wisdom to ponder:
“One of the funny things about the stock market is that every time one person buys, another sells, and both think they are astute.” — William Feather