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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

Investors can learn a lot from Warren Buffett, whose above quote teaches the importance of thinking about investment time horizon, and asking ourselves before buying any given stock: can we envision holding onto it for years — even a five year holding period possibly?

Suppose a “buy-and-hold” investor was considering an investment into Chipotle Mexican Grill Inc (NYSE: CMG) back in 2016: back then, such an investor may have been pondering this very same question. Had they answered “yes” to a full five year investment time horizon and then actually held for these past 5 years, here’s how that investment would have turned out.

Start date: 11/21/2016


End date: 11/18/2021
Start price/share: $412.38
End price/share: $1,779.17
Starting shares: 24.25
Ending shares: 24.25
Dividends reinvested/share: $0.00
Total return: 331.44%
Average annual return: 34.01%
Starting investment: $10,000.00
Ending investment: $43,150.85

As we can see, the five year investment result worked out exceptionally well, with an annualized rate of return of 34.01%. This would have turned a $10K investment made 5 years ago into $43,150.85 today (as of 11/18/2021). On a total return basis, that’s a result of 331.44% (something to think about: how might CMG 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:
“The older I get, the more I see a straight path where I want to go. If you’re going to hunt elephants, don’t get off the trail for a rabbit.” — T. Boone Pickens