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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 Mohawk Industries, Inc. (NYSE: MHK)? Today, we examine the outcome of a five year investment into the stock back in 2016.

Start date: 11/29/2016


End date: 11/26/2021
Start price/share: $200.10
End price/share: $175.42
Starting shares: 49.98
Ending shares: 49.98
Dividends reinvested/share: $0.00
Total return: -12.33%
Average annual return: -2.60%
Starting investment: $10,000.00
Ending investment: $8,767.13

The above analysis shows the five year investment result worked out poorly, with an annualized rate of return of -2.60%. This would have turned a $10K investment made 5 years ago into $8,767.13 today (as of 11/26/2021). On a total return basis, that’s a result of -12.33% (something to think about: how might MHK shares perform over the next 5 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]

More investment wisdom to ponder:
“Investors should always keep in mind that the most important metric is not the returns achieved but the returns weighed against the risks incurred. Ultimately, nothing should be more important to investors than the ability to sleep soundly at night.” — Seth Klarman