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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 2016, investors considering an investment into shares of Fiserv Inc (NASD: FISV) 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: 01/14/2016


End date: 01/13/2021
Start price/share: $44.52
End price/share: $110.24
Starting shares: 224.62
Ending shares: 224.62
Dividends reinvested/share: $0.00
Total return: 147.62%
Average annual return: 19.87%
Starting investment: $10,000.00
Ending investment: $24,761.00

The above analysis shows the five year investment result worked out exceptionally well, with an annualized rate of return of 19.87%. This would have turned a $10K investment made 5 years ago into $24,761.00 today (as of 01/13/2021). On a total return basis, that’s a result of 147.62% (something to think about: how might FISV 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:
“If you have more than 120 or 130 I.Q. points, you can afford to give the rest away. You don’t need extraordinary intelligence to succeed as an investor.” — Warren Buffett