“I buy on the assumption that they could close the market the next day and not reopen it for five years.”
— Warren Buffett
The investment philosophy practiced by Warren Buffett calls for investors to take a long-term horizon when making an investment, such as a five year holding period (or even longer), and reconsider making the investment in the first place if unable to envision holding the stock for at least five years. Today, we look at how such a long-term strategy would have done for investors in Akamai Technologies Inc (NASD: AKAM) back in 2018, holding through to today.
| Start date: | 06/04/2018 |
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| End date: | 06/01/2023 | ||||
| Start price/share: | $77.07 | ||||
| End price/share: | $91.45 | ||||
| Starting shares: | 129.75 | ||||
| Ending shares: | 129.75 | ||||
| Dividends reinvested/share: | $0.00 | ||||
| Total return: | 18.66% | ||||
| Average annual return: | 3.48% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $11,863.17 | ||||
As shown above, the five year investment result worked out as follows, with an annualized rate of return of 3.48%. This would have turned a $10K investment made 5 years ago into $11,863.17 today (as of 06/01/2023). On a total return basis, that’s a result of 18.66% (something to think about: how might AKAM 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:
“Compound interest is the eighth wonder of the world. He who understands it, earns it; he who doesn’t, pays it.” — Albert Einstein
