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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

The above quote from Warren Buffett is timeless, and brings into focus the choice about time horizon that any investor should think about before buying a stock they are considering. Behind every stock is an actual business; what will that business look like over a five year period?

Today, let’s look backwards in time to 2016, and take a look at what happened to investors who asked that very question about Adobe Inc (NASD: ADBE), by taking a look at the investment outcome over a five year holding period.

Start date: 08/24/2016


End date: 08/23/2021
Start price/share: $101.14
End price/share: $656.86
Starting shares: 98.87
Ending shares: 98.87
Dividends reinvested/share: $0.00
Total return: 549.46%
Average annual return: 45.38%
Starting investment: $10,000.00
Ending investment: $64,941.65

As we can see, the five year investment result worked out exceptionally well, with an annualized rate of return of 45.38%. This would have turned a $10K investment made 5 years ago into $64,941.65 today (as of 08/23/2021). On a total return basis, that’s a result of 549.46% (something to think about: how might ADBE shares perform over the next 5 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]

Here’s one more great investment quote before you go:
“Invest for the long haul. Don’t get too greedy and don’t get too scared.” — Shelby Davis