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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 above quote from Warren Buffett is timeless, and brings into focus the choice about time horizon that any investor should think about before buying a stock they are considering. Behind every stock is an actual business; what will that business look like over a five year period?

Today, let’s look backwards in time to 2015, and take a look at what happened to investors who asked that very question about Adobe Inc (NASD: ADBE), by taking a look at the investment outcome over a five year holding period.

Start date: 05/19/2015


End date: 05/18/2020
Start price/share: $79.62
End price/share: $367.97
Starting shares: 125.60
Ending shares: 125.60
Dividends reinvested/share: $0.00
Total return: 362.16%
Average annual return: 35.80%
Starting investment: $10,000.00
Ending investment: $46,223.51

The above analysis shows the five year investment result worked out exceptionally well, with an annualized rate of return of 35.80%. This would have turned a $10K investment made 5 years ago into $46,223.51 today (as of 05/18/2020). On a total return basis, that’s a result of 362.16% (something to think about: how might ADBE 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:
“We don’t have to be smarter than the rest. We have to be more disciplined than the rest.” — Warren Buffett