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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

One of the most important things investors can learn from Warren Buffett, is about how they approach their time horizon for an investment into a stock under consideration. Because immediately after buying shares of a given stock, investors will then be able to check on the day-to-day (and even minute-by-minute) market value. Some days the stock market will be up, other days down. These daily fluctuations can often distract from the long-term view. Today, we look at the result of a five year holding period for an investor who was considering F5 Networks, Inc. (NASD: FFIV) back in 2015, bought the stock, ignored the market’s ups and downs, and simply held through to today.

Start date: 12/10/2015


End date: 12/09/2020
Start price/share: $99.06
End price/share: $170.58
Starting shares: 100.95
Ending shares: 100.95
Dividends reinvested/share: $0.00
Total return: 72.20%
Average annual return: 11.48%
Starting investment: $10,000.00
Ending investment: $17,223.21

As shown above, the five year investment result worked out quite well, with an annualized rate of return of 11.48%. This would have turned a $10K investment made 5 years ago into $17,223.21 today (as of 12/09/2020). On a total return basis, that’s a result of 72.20% (something to think about: how might FFIV shares perform over the next 5 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]

Another great investment quote to think about:
“There’s a virtuous cycle when people have to defend challenges to their ideas. Any gaps in thinking or analysis become clear pretty quickly when smart people ask good, logical questions.” — Joel Greenblatt