“I buy on the assumption that they could close the market the next day and not reopen it for five years.”
— Warren Buffett
The above quote from Warren Buffett is timeless, and brings into focus the choice about time horizon that any investor should think about before buying a stock they are considering. Behind every stock is an actual business; what will that business look like over a five year period?
Today, let’s look backwards in time to 2018, and take a look at what happened to investors who asked that very question about Boston Scientific Corp. (NYSE: BSX), by taking a look at the investment outcome over a five year holding period.
| Start date: | 11/21/2018 |
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| End date: | 11/20/2023 | ||||
| Start price/share: | $34.60 | ||||
| End price/share: | $54.46 | ||||
| Starting shares: | 289.02 | ||||
| Ending shares: | 289.02 | ||||
| Dividends reinvested/share: | $0.00 | ||||
| Total return: | 57.40% | ||||
| Average annual return: | 9.50% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $15,742.39 | ||||
As we can see, the five year investment result worked out well, with an annualized rate of return of 9.50%. This would have turned a $10K investment made 5 years ago into $15,742.39 today (as of 11/20/2023). On a total return basis, that’s a result of 57.40% (something to think about: how might BSX 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:
“All the opportunity in the world means nothing if you don’t actually pull the trigger.” — Sam Zell
