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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 Dollar Tree Inc (NASD: DLTR) 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: 06/14/2017


End date: 06/13/2022
Start price/share: $75.27
End price/share: $155.01
Starting shares: 132.86
Ending shares: 132.86
Dividends reinvested/share: $0.00
Total return: 105.94%
Average annual return: 15.54%
Starting investment: $10,000.00
Ending investment: $20,590.26

The above analysis shows the five year investment result worked out exceptionally well, with an annualized rate of return of 15.54%. This would have turned a $10K investment made 5 years ago into $20,590.26 today (as of 06/13/2022). On a total return basis, that’s a result of 105.94% (something to think about: how might DLTR 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:
“In the end, how your investments behave is much less important than how you behave.” — Benjamin Graham