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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

One of the most important things investors can learn from Warren Buffett, is about how they approach their time horizon for an investment into a stock under consideration. Because immediately after buying shares of a given stock, investors will then be able to check on the day-to-day (and even minute-by-minute) market value. Some days the stock market will be up, other days down. These daily fluctuations can often distract from the long-term view. Today, we look at the result of a five year holding period for an investor who was considering Mosaic Co (NYSE: MOS) back in 2018, bought the stock, ignored the market’s ups and downs, and simply held through to today.

Start date: 08/23/2018


End date: 08/22/2023
Start price/share: $29.43
End price/share: $38.86
Starting shares: 339.79
Ending shares: 359.17
Dividends reinvested/share: $1.91
Total return: 39.57%
Average annual return: 6.90%
Starting investment: $10,000.00
Ending investment: $13,960.10

The above analysis shows the five year investment result worked out well, with an annualized rate of return of 6.90%. This would have turned a $10K investment made 5 years ago into $13,960.10 today (as of 08/22/2023). On a total return basis, that’s a result of 39.57% (something to think about: how might MOS shares perform over the next 5 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]

Notice that Mosaic Co paid investors a total of $1.91/share in dividends over the 5 holding period, marking a second component of the total return beyond share price change alone. Much like watering a tree, reinvesting dividends can help an investment to grow over time — for the above calculations we assume dividend reinvestment (and for this exercise the closing price on ex-date is used for the reinvestment of a given dividend).

Based upon the most recent annualized dividend rate of .8/share, we calculate that MOS has a current yield of approximately 2.06%. Another interesting datapoint we can examine is ‘yield on cost’ — in other words, we can express the current annualized dividend of .8 against the original $29.43/share purchase price. This works out to a yield on cost of 7.00%.

One more piece of investment wisdom to leave you with:
“Cash is a fact, profit is an opinion.” — Alfred Rappaport