“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 2017, and take a look at what happened to investors who asked that very question about Chipotle Mexican Grill Inc (NYSE: CMG), by taking a look at the investment outcome over a five year holding period.
|Average annual return:||27.66%|
As we can see, the five year investment result worked out exceptionally well, with an annualized rate of return of 27.66%. This would have turned a $10K investment made 5 years ago into $33,837.83 today (as of 04/13/2022). On a total return basis, that’s a result of 238.38% (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.]
Here’s one more great investment quote before you go:
“People who succeed in the stock market also accept periodic losses, setbacks, and unexpected occurrences. Calamitous drops do not scare them out of the game.” — Peter Lynch