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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 Waters Corp. (NYSE: WAT) 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: 08/07/2017


End date: 08/04/2022
Start price/share: $177.95
End price/share: $334.56
Starting shares: 56.20
Ending shares: 56.20
Dividends reinvested/share: $0.00
Total return: 88.01%
Average annual return: 13.47%
Starting investment: $10,000.00
Ending investment: $18,797.69

As shown above, the five year investment result worked out quite well, with an annualized rate of return of 13.47%. This would have turned a $10K investment made 5 years ago into $18,797.69 today (as of 08/04/2022). On a total return basis, that’s a result of 88.01% (something to think about: how might WAT 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 function of economic forecasting is to make astrology look respectable.” — John Galbraith