“When we own portions of outstanding businesses with outstanding managements, our favorite holding period is forever.”
— Warren Buffett
The Warren Buffett investment philosophy calls for a long-term investment horizon, where a twenty year holding period, or even longer, would fit right into the strategy. How would such a strategy have worked out for an investment into Citigroup Inc (NYSE: C)? Today, we examine the outcome of a twenty year investment into the stock back in 2005.
| Start date: | 10/07/2005 |
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| End date: | 10/06/2025 | ||||
| Start price/share: | $454.10 | ||||
| End price/share: | $98.05 | ||||
| Starting shares: | 22.02 | ||||
| Ending shares: | 34.34 | ||||
| Dividends reinvested/share: | $74.15 | ||||
| Total return: | -66.33% | ||||
| Average annual return: | -5.29% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $3,370.22 | ||||
As we can see, the twenty year investment result worked out poorly, with an annualized rate of return of -5.29%. This would have turned a $10K investment made 20 years ago into $3,370.22 today (as of 10/06/2025). On a total return basis, that’s a result of -66.33% (something to think about: how might C shares perform over the next 20 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
Notice that Citigroup Inc paid investors a total of $74.15/share in dividends over the 20 holding period, marking a second component of the total return beyond share price change alone. Much like watering a tree, reinvesting dividends can help an investment to grow over time — for the above calculations we assume dividend reinvestment (and for this exercise the closing price on ex-date is used for the reinvestment of a given dividend).
Based upon the most recent annualized dividend rate of 2.4/share, we calculate that C has a current yield of approximately 2.45%. Another interesting datapoint we can examine is ‘yield on cost’ — in other words, we can express the current annualized dividend of 2.4 against the original $454.10/share purchase price. This works out to a yield on cost of 0.54%.
Another great investment quote to think about:
“All the opportunity in the world means nothing if you don’t actually pull the trigger.” — Sam Zell
