“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.
|Average annual return:||8.29%|
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