“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: | 05/12/2016 |
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| End date: | 05/11/2021 | ||||
| Start price/share: | $139.11 | ||||
| End price/share: | $171.41 | ||||
| Starting shares: | 71.89 | ||||
| Ending shares: | 71.89 | ||||
| Dividends reinvested/share: | $0.00 | ||||
| Total return: | 23.22% | ||||
| Average annual return: | 4.26% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $12,319.37 | ||||
As shown above, the five year investment result worked out as follows, with an annualized rate of return of 4.26%. This would have turned a $10K investment made 5 years ago into $12,319.37 today (as of 05/11/2021). On a total return basis, that’s a result of 23.22% (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.]
Another great investment quote to think about:
“The idea that a bell rings to signal when to get into or out of the stock market is simply not credible. After nearly fifty years in this business, I don’t know anybody who has done it successfully and consistently.” — Jack Bogle
