“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 Monster Beverage Corp (NASD: MNST), by taking a look at the investment outcome over a five year holding period.
|Average annual return:||15.49%|
As shown above, the five year investment result worked out exceptionally well, with an annualized rate of return of 15.49%. This would have turned a $10K investment made 5 years ago into $20,545.75 today (as of 11/08/2021). On a total return basis, that’s a result of 105.50% (something to think about: how might MNST shares perform over the next 5 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
One more investment quote to leave you with:
“The idea that a bell rings to signal when to get into or out of the stock market is simply not credible. After nearly fifty years in this business, I don’t know anybody who has done it successfully and consistently.” — Jack Bogle