“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 Dollar Tree Inc (NASD: DLTR)? Today, we examine the outcome of a five year investment into the stock back in 2016.
| Start date: | 06/02/2016 |
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| End date: | 06/01/2021 | ||||
| Start price/share: | $91.05 | ||||
| End price/share: | $98.88 | ||||
| Starting shares: | 109.83 | ||||
| Ending shares: | 109.83 | ||||
| Dividends reinvested/share: | $0.00 | ||||
| Total return: | 8.60% | ||||
| Average annual return: | 1.66% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $10,858.02 | ||||
As we can see, the five year investment result worked out as follows, with an annualized rate of return of 1.66%. This would have turned a $10K investment made 5 years ago into $10,858.02 today (as of 06/01/2021). On a total return basis, that’s a result of 8.60% (something to think about: how might DLTR 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 underlying principles of sound investment should not alter from decade to decade, but the application of these principles must be adapted to significant changes in the financial mechanisms and climate.” — Benjamin Graham
