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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

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 2019, and take a look at what happened to investors who asked that very question about Alphabet Inc (NASD: GOOG), by taking a look at the investment outcome over a five year holding period.

Start date: 06/10/2019


End date: 06/07/2024
Start price/share: $54.02
End price/share: $175.95
Starting shares: 185.12
Ending shares: 185.12
Dividends reinvested/share: $0.00
Total return: 225.71%
Average annual return: 26.66%
Starting investment: $10,000.00
Ending investment: $32,577.38

As we can see, the five year investment result worked out exceptionally well, with an annualized rate of return of 26.66%. This would have turned a $10K investment made 5 years ago into $32,577.38 today (as of 06/07/2024). On a total return basis, that’s a result of 225.71% (something to think about: how might GOOG 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:
“A stock is not just a ticker symbol or an electronic blip; it is an ownership interest in an actual business, with an underlying value that does not depend on its share price.” — Benjamin Graham