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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

This inspiring quote from Warren Buffett teaches us the importance of considering our investment time horizon when approaching any given investment: Could we envision ourselves holding the stock we are considering for many years? Even a five year holding period potentially?

For “buy-and-hold” investors taking a long-term view, what’s important isn’t the short-term stock market fluctuations that will inevitably occur, but what happens over the long haul. Looking back 5 years to 2015, investors considering an investment into shares of Paycom Software Inc (NYSE: PAYC) may have been pondering this very question and thinking about their potential investment result over a full five year time horizon. Here’s how that would have worked out.

Start date: 05/11/2015


End date: 05/08/2020
Start price/share: $38.29
End price/share: $272.03
Starting shares: 261.16
Ending shares: 261.16
Dividends reinvested/share: $0.00
Total return: 610.45%
Average annual return: 48.05%
Starting investment: $10,000.00
Ending investment: $71,051.82

The above analysis shows the five year investment result worked out exceptionally well, with an annualized rate of return of 48.05%. This would have turned a $10K investment made 5 years ago into $71,051.82 today (as of 05/08/2020). On a total return basis, that’s a result of 610.45% (something to think about: how might PAYC 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:
“If I’ve learned one thing in this life it’s this: even if you lose, don’t lose the lesson.” — Daymond John