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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

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 2019: 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: 01/28/2019


End date: 01/25/2024
Start price/share: $19.76
End price/share: $182.63
Starting shares: 506.07
Ending shares: 506.07
Dividends reinvested/share: $0.00
Total return: 824.24%
Average annual return: 56.09%
Starting investment: $10,000.00
Ending investment: $92,430.61

As we can see, the five year investment result worked out exceptionally well, with an annualized rate of return of 56.09%. This would have turned a $10K investment made 5 years ago into $92,430.61 today (as of 01/25/2024). On a total return basis, that’s a result of 824.24% (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.]

Here’s one more great investment quote before you go:
“Investors should purchase stocks like they purchase groceries, not like they purchase perfume.” — Benjamin Graham