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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 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 United Airlines Holdings Inc (NASD: UAL)? Today, we examine the outcome of a five year investment into the stock back in 2016.

Start date: 11/30/2016


End date: 11/29/2021
Start price/share: $68.95
End price/share: $42.54
Starting shares: 145.03
Ending shares: 145.03
Dividends reinvested/share: $0.00
Total return: -38.30%
Average annual return: -9.21%
Starting investment: $10,000.00
Ending investment: $6,168.65

As we can see, the five year investment result worked out poorly, with an annualized rate of return of -9.21%. This would have turned a $10K investment made 5 years ago into $6,168.65 today (as of 11/29/2021). On a total return basis, that’s a result of -38.30% (something to think about: how might UAL 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:
“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