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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 2016, and take a look at what happened to investors who asked that very question about F5 Networks, Inc. (NASD: FFIV), by taking a look at the investment outcome over a five year holding period.

Start date: 04/06/2016


End date: 04/05/2021
Start price/share: $103.89
End price/share: $215.28
Starting shares: 96.26
Ending shares: 96.26
Dividends reinvested/share: $0.00
Total return: 107.22%
Average annual return: 15.69%
Starting investment: $10,000.00
Ending investment: $20,724.26

As we can see, the five year investment result worked out exceptionally well, with an annualized rate of return of 15.69%. This would have turned a $10K investment made 5 years ago into $20,724.26 today (as of 04/05/2021). On a total return basis, that’s a result of 107.22% (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.]

One more investment quote to leave you with:
“You can’t restate a dividend.” — Malon Wilkus