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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 DaVita Inc (NYSE: DVA) 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: 02/01/2016


End date: 01/29/2021
Start price/share: $67.41
End price/share: $117.37
Starting shares: 148.35
Ending shares: 148.35
Dividends reinvested/share: $0.00
Total return: 74.11%
Average annual return: 11.74%
Starting investment: $10,000.00
Ending investment: $17,414.51

As shown above, the five year investment result worked out quite well, with an annualized rate of return of 11.74%. This would have turned a $10K investment made 5 years ago into $17,414.51 today (as of 01/29/2021). On a total return basis, that’s a result of 74.11% (something to think about: how might DVA 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:
“The stock market is a device to transfer money from the impatient to the patient.” — Warren Buffett