“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 Advanced Micro Devices Inc (NASD: AMD)? Today, we examine the outcome of a five year investment into the stock back in 2015.
| Start date: | 05/22/2015 |
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| End date: | 05/21/2020 | ||||
| Start price/share: | $2.28 | ||||
| End price/share: | $54.65 | ||||
| Starting shares: | 4,385.96 | ||||
| Ending shares: | 4,385.96 | ||||
| Dividends reinvested/share: | $0.00 | ||||
| Total return: | 2,296.93% | ||||
| Average annual return: | 88.70% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $239,670.75 | ||||
As we can see, the five year investment result worked out exceptionally well, with an annualized rate of return of 88.70%. This would have turned a $10K investment made 5 years ago into $239,670.75 today (as of 05/21/2020). On a total return basis, that’s a result of 2,296.93% (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.]
One more piece of investment wisdom to leave you with:
“Ensure management’s interests are aligned with shareholders.” — Sam Zell
