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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

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 Mohawk Industries, Inc. (NYSE: MHK)? Today, we examine the outcome of a five year investment into the stock back in 2015.

Start date: 04/30/2015


End date: 04/29/2020
Start price/share: $173.50
End price/share: $93.02
Starting shares: 57.64
Ending shares: 57.64
Dividends reinvested/share: $0.00
Total return: -46.39%
Average annual return: -11.72%
Starting investment: $10,000.00
Ending investment: $5,359.98

As shown above, the five year investment result worked out poorly, with an annualized rate of return of -11.72%. This would have turned a $10K investment made 5 years ago into $5,359.98 today (as of 04/29/2020). On a total return basis, that’s a result of -46.39% (something to think about: how might MHK shares perform over the next 5 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]

Here’s one more great investment quote before you go:
“Wide diversification is only required when investors do not understand what they are doing.” — Warren Buffett