“I buy on the assumption that they could close the market the next day and not reopen it for five years.”
— Warren Buffett
The Warren Buffett investment philosophy calls for a long-term investment horizon, where a five year holding period, or even longer, would fit right into the strategy. How would such a strategy have worked out for an investment into Illumina Inc (NASD: ILMN)? Today, we examine the outcome of a five year investment into the stock back in 2018.
| Start date: | 02/20/2018 |
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| End date: | 02/16/2023 | ||||
| Start price/share: | $226.57 | ||||
| End price/share: | $211.82 | ||||
| Starting shares: | 44.14 | ||||
| Ending shares: | 44.14 | ||||
| Dividends reinvested/share: | $0.00 | ||||
| Total return: | -6.51% | ||||
| Average annual return: | -1.34% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $9,348.75 | ||||
As we can see, the five year investment result worked out poorly, with an annualized rate of return of -1.34%. This would have turned a $10K investment made 5 years ago into $9,348.75 today (as of 02/16/2023). On a total return basis, that’s a result of -6.51% (something to think about: how might ILMN 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:
“A market downturn doesn’t bother us. It is an opportunity to increase our ownership of great companies with great management at good prices.” — Warren Buffett
