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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 Warren Buffett investment philosophy calls for a long-term investment horizon, where a five year holding period, or even longer, would fit right into the strategy. How would such a strategy have worked out for an investment into Alexion Pharmaceuticals Inc. (NASD: ALXN)? Today, we examine the outcome of a five year investment into the stock back in 2016.

Start date: 02/24/2016


End date: 02/23/2021
Start price/share: $141.97
End price/share: $152.93
Starting shares: 70.44
Ending shares: 70.44
Dividends reinvested/share: $0.00
Total return: 7.72%
Average annual return: 1.50%
Starting investment: $10,000.00
Ending investment: $10,773.28

As we can see, the five year investment result worked out as follows, with an annualized rate of return of 1.50%. This would have turned a $10K investment made 5 years ago into $10,773.28 today (as of 02/23/2021). On a total return basis, that’s a result of 7.72% (something to think about: how might ALXN 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:
“The whole secret to winning big in the stock market is not to be right all the time, but to lose the least amount possible when you’re wrong.” — William O’Neil