Photo credit:

“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 Tesla Inc (NASD: TSLA) 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.

Start date: 12/17/2018


End date: 12/14/2023
Start price/share: $23.23
End price/share: $251.05
Starting shares: 430.48
Ending shares: 430.48
Dividends reinvested/share: $0.00
Total return: 980.71%
Average annual return: 61.05%
Starting investment: $10,000.00
Ending investment: $108,061.16

The above analysis shows the five year investment result worked out exceptionally well, with an annualized rate of return of 61.05%. This would have turned a $10K investment made 5 years ago into $108,061.16 today (as of 12/14/2023). On a total return basis, that’s a result of 980.71% (something to think about: how might TSLA 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:
“Sentimentality about an investments leads to lack of discipline.” — Sam Zell