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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 Hologic Inc (NASD: HOLX) back in 2017: 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: 04/17/2017


End date: 04/13/2022
Start price/share: $42.64
End price/share: $76.89
Starting shares: 234.52
Ending shares: 234.52
Dividends reinvested/share: $0.00
Total return: 80.32%
Average annual return: 12.54%
Starting investment: $10,000.00
Ending investment: $18,034.86

As we can see, the five year investment result worked out quite well, with an annualized rate of return of 12.54%. This would have turned a $10K investment made 5 years ago into $18,034.86 today (as of 04/13/2022). On a total return basis, that’s a result of 80.32% (something to think about: how might HOLX 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:
“If you don’t study any companies, you have the same success buying stocks as you do in a poker game if you bet without looking at your cards.” — Peter Lynch