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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 Align Technology Inc (NASD: ALGN), by taking a look at the investment outcome over a five year holding period.

Start date: 12/04/2015


End date: 12/03/2020
Start price/share: $65.56
End price/share: $511.00
Starting shares: 152.53
Ending shares: 152.53
Dividends reinvested/share: $0.00
Total return: 679.44%
Average annual return: 50.75%
Starting investment: $10,000.00
Ending investment: $77,942.62

As shown above, the five year investment result worked out exceptionally well, with an annualized rate of return of 50.75%. This would have turned a $10K investment made 5 years ago into $77,942.62 today (as of 12/03/2020). On a total return basis, that’s a result of 679.44% (something to think about: how might ALGN 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:
“As long as you enjoy investing, you’ll be willing to do the homework and stay in the game.” — Jim Cramer