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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

Investors can learn a lot from Warren Buffett, whose above quote teaches the importance of thinking about investment time horizon, and asking ourselves before buying any given stock: can we envision holding onto it for years — even a five year holding period possibly?

Suppose a “buy-and-hold” investor was considering an investment into Advanced Micro Devices Inc (NASD: AMD) back in 2015: back then, such an investor may have been pondering this very same question. Had they answered “yes” to a full five year investment time horizon and then actually held for these past 5 years, here’s how that investment would have turned out.

Start date: 09/29/2015


End date: 09/28/2020
Start price/share: $1.67
End price/share: $79.48
Starting shares: 5,988.02
Ending shares: 5,988.02
Dividends reinvested/share: $0.00
Total return: 4,659.28%
Average annual return: 116.43%
Starting investment: $10,000.00
Ending investment: $475,889.34

As shown above, the five year investment result worked out exceptionally well, with an annualized rate of return of 116.43%. This would have turned a $10K investment made 5 years ago into $475,889.34 today (as of 09/28/2020). On a total return basis, that’s a result of 4,659.28% (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.]

Here’s one more great investment quote before you go:
“We ignore outlooks and forecasts… we’re lousy at it and we admit it … everyone else is lousy too, but most people won’t admit it.” — Martin Whitman