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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 2016, bought the stock, ignored the market’s ups and downs, and simply held through to today.

Start date: 05/06/2016


End date: 05/05/2021
Start price/share: $100.64
End price/share: $180.71
Starting shares: 99.36
Ending shares: 99.36
Dividends reinvested/share: $0.00
Total return: 79.56%
Average annual return: 12.42%
Starting investment: $10,000.00
Ending investment: $17,956.34

As we can see, the five year investment result worked out quite well, with an annualized rate of return of 12.42%. This would have turned a $10K investment made 5 years ago into $17,956.34 today (as of 05/05/2021). On a total return basis, that’s a result of 79.56% (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 piece of investment wisdom to leave you with:
“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