“I buy on the assumption that they could close the market the next day and not reopen it for five years.”
— Warren Buffett
This inspiring quote from Warren Buffett teaches us the importance of considering our investment time horizon when approaching any given investment: Could we envision ourselves holding the stock we are considering for many years? Even a five year holding period potentially?
For “buy-and-hold” investors taking a long-term view, what’s important isn’t the short-term stock market fluctuations that will inevitably occur, but what happens over the long haul. Looking back 5 years to 2017, investors considering an investment into shares of Live Nation Entertainment Inc (NYSE: LYV) may have been pondering this very question and thinking about their potential investment result over a full five year time horizon. Here’s how that would have worked out.
| Start date: | 10/02/2017 |
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| End date: | 09/29/2022 | ||||
| Start price/share: | $42.81 | ||||
| End price/share: | $75.26 | ||||
| Starting shares: | 233.59 | ||||
| Ending shares: | 233.59 | ||||
| Dividends reinvested/share: | $0.00 | ||||
| Total return: | 75.80% | ||||
| Average annual return: | 11.96% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $17,581.08 | ||||
As we can see, the five year investment result worked out quite well, with an annualized rate of return of 11.96%. This would have turned a $10K investment made 5 years ago into $17,581.08 today (as of 09/29/2022). On a total return basis, that’s a result of 75.80% (something to think about: how might LYV 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:
“Twenty years in this business convinces me that any normal person using the customary three percent of the brain can pick stocks just as well, if not better, than the average Wall Street expert.” — Peter Lynch
