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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

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: 08/23/2018


End date: 08/22/2023
Start price/share: $335.72
End price/share: $162.94
Starting shares: 29.79
Ending shares: 29.79
Dividends reinvested/share: $0.00
Total return: -51.47%
Average annual return: -13.46%
Starting investment: $10,000.00
Ending investment: $4,853.83

As we can see, the five year investment result worked out poorly, with an annualized rate of return of -13.46%. This would have turned a $10K investment made 5 years ago into $4,853.83 today (as of 08/22/2023). On a total return basis, that’s a result of -51.47% (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:
“While some might mistakenly consider value investing a mechanical tool for identifying bargains, it is actually a comprehensive investment philosophy that emphasizes the need to perform in-depth fundamental analysis, pursue long-term investment results, limit risk, and resist crowd psychology.” — Seth Klarman