“I buy on the assumption that they could close the market the next day and not reopen it for five years.”
— Warren Buffett
One of the most important things investors can learn from Warren Buffett, is about how they approach their time horizon for an investment into a stock under consideration. Because immediately after buying shares of a given stock, investors will then be able to check on the day-to-day (and even minute-by-minute) market value. Some days the stock market will be up, other days down. These daily fluctuations can often distract from the long-term view. Today, we look at the result of a five year holding period for an investor who was considering Meta Platforms Inc (NASD: META) back in 2019, bought the stock, ignored the market’s ups and downs, and simply held through to today.
| Start date: | 02/19/2019 |
|
|||
| End date: | 02/15/2024 | ||||
| Start price/share: | $162.29 | ||||
| End price/share: | $484.03 | ||||
| Starting shares: | 61.62 | ||||
| Ending shares: | 61.62 | ||||
| Dividends reinvested/share: | $0.00 | ||||
| Total return: | 198.25% | ||||
| Average annual return: | 24.47% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $29,822.37 | ||||
As shown above, the five year investment result worked out exceptionally well, with an annualized rate of return of 24.47%. This would have turned a $10K investment made 5 years ago into $29,822.37 today (as of 02/15/2024). On a total return basis, that’s a result of 198.25% (something to think about: how might META shares perform over the next 5 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
More investment wisdom to ponder:
“When the public is most frightened, only the strong are left, and that’s when the market is in the best possible hands.” — Victor Niederhoffer
