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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

This inspiring quote from Warren Buffett teaches us the importance of considering our investment time horizon when approaching any given investment: Could we envision ourselves holding the stock we are considering for many years? Even a five year holding period potentially?

For “buy-and-hold” investors taking a long-term view, what’s important isn’t the short-term stock market fluctuations that will inevitably occur, but what happens over the long haul. Looking back 5 years to 2018, investors considering an investment into shares of Tyler Technologies, Inc. (NYSE: TYL) may have been pondering this very question and thinking about their potential investment result over a full five year time horizon. Here’s how that would have worked out.

Start date: 09/18/2018


End date: 09/15/2023
Start price/share: $242.73
End price/share: $375.38
Starting shares: 41.20
Ending shares: 41.20
Dividends reinvested/share: $0.00
Total return: 54.65%
Average annual return: 9.12%
Starting investment: $10,000.00
Ending investment: $15,463.72

As we can see, the five year investment result worked out well, with an annualized rate of return of 9.12%. This would have turned a $10K investment made 5 years ago into $15,463.72 today (as of 09/15/2023). On a total return basis, that’s a result of 54.65% (something to think about: how might TYL 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:
“Generally, the greater the stigma or revulsion, the better the bargain.” — Seth Klarman