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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 DaVita Inc (NYSE: DVA) back in 2018: 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: 07/11/2018


End date: 07/10/2023
Start price/share: $69.64
End price/share: $103.69
Starting shares: 143.60
Ending shares: 143.60
Dividends reinvested/share: $0.00
Total return: 48.89%
Average annual return: 8.29%
Starting investment: $10,000.00
Ending investment: $14,891.61

As we can see, the five year investment result worked out well, with an annualized rate of return of 8.29%. This would have turned a $10K investment made 5 years ago into $14,891.61 today (as of 07/10/2023). On a total return basis, that’s a result of 48.89% (something to think about: how might DVA shares perform over the next 5 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]

One more piece of investment wisdom to leave you with:
“In investing, what is comfortable is rarely profitable.” — Robert Arnott