“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 Akamai Technologies Inc (NASD: AKAM) back in 2016, bought the stock, ignored the market’s ups and downs, and simply held through to today.
|Average annual return:||15.56%|
As we can see, the five year investment result worked out exceptionally well, with an annualized rate of return of 15.56%. This would have turned a $10K investment made 5 years ago into $20,591.76 today (as of 08/26/2021). On a total return basis, that’s a result of 105.89% (something to think about: how might AKAM shares perform over the next 5 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
More investment wisdom to ponder:
“If a speculator is correct half of the time, he is hitting a good average. Even being right 3 or 4 times out of 10 should yield a person a fortune if he has the sense to cut his losses quickly on the ventures where he is wrong.” — Bernard Baruch