“I buy on the assumption that they could close the market the next day and not reopen it for five years.”
— Warren Buffett
The Warren Buffett investment philosophy calls for a long-term investment horizon, where a five year holding period, or even longer, would fit right into the strategy. How would such a strategy have worked out for an investment into Adobe Inc (NASD: ADBE)? Today, we examine the outcome of a five year investment into the stock back in 2020.
| Start date: | 07/02/2020 |
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| End date: | 07/01/2025 | ||||
| Start price/share: | $442.95 | ||||
| End price/share: | $392.10 | ||||
| Starting shares: | 22.58 | ||||
| Ending shares: | 22.58 | ||||
| Dividends reinvested/share: | $0.00 | ||||
| Total return: | -11.48% | ||||
| Average annual return: | -2.41% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $8,851.70 | ||||
The above analysis shows the five year investment result worked out poorly, with an annualized rate of return of -2.41%. This would have turned a $10K investment made 5 years ago into $8,851.70 today (as of 07/01/2025). On a total return basis, that’s a result of -11.48% (something to think about: how might ADBE 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:
“In the short run, the market is a voting machine but in the long run, it is a weighing machine.” — Benjamin Graham
