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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 Intuitive Surgical Inc (NASD: ISRG) 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: 05/10/2016


End date: 05/07/2021
Start price/share: $208.85
End price/share: $857.09
Starting shares: 47.88
Ending shares: 47.88
Dividends reinvested/share: $0.00
Total return: 310.39%
Average annual return: 32.67%
Starting investment: $10,000.00
Ending investment: $41,038.45

As we can see, the five year investment result worked out exceptionally well, with an annualized rate of return of 32.67%. This would have turned a $10K investment made 5 years ago into $41,038.45 today (as of 05/07/2021). On a total return basis, that’s a result of 310.39% (something to think about: how might ISRG 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:
“It is remarkable how much long-term advantage people like us have gotten by trying to be consistently not stupid, instead of trying to be very intelligent.” — Charlie Munger