Photo credit:

“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 United Airlines Holdings Inc (NASD: UAL)? Today, we examine the outcome of a five year investment into the stock back in 2015.

Start date: 05/01/2015


End date: 04/30/2020
Start price/share: $61.40
End price/share: $29.58
Starting shares: 162.87
Ending shares: 162.87
Dividends reinvested/share: $0.00
Total return: -51.82%
Average annual return: -13.58%
Starting investment: $10,000.00
Ending investment: $4,818.34

The above analysis shows the five year investment result worked out poorly, with an annualized rate of return of -13.58%. This would have turned a $10K investment made 5 years ago into $4,818.34 today (as of 04/30/2020). On a total return basis, that’s a result of -51.82% (something to think about: how might UAL 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:
“Smart investing doesn’t consist of buying good assets but of buying assets well. This is a very, very important distinction that very, very few people understand.” — Howard Marks