“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 Salesforce Inc (AMEX: CRM)? Today, we examine the outcome of a five year investment into the stock back in 2020.
| Start date: | 11/19/2020 |
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| End date: | 11/18/2025 | ||||
| Start price/share: | $264.65 | ||||
| End price/share: | $233.50 | ||||
| Starting shares: | 37.79 | ||||
| Ending shares: | 38.19 | ||||
| Dividends reinvested/share: | $2.85 | ||||
| Total return: | -10.83% | ||||
| Average annual return: | -2.27% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $8,915.37 | ||||
As we can see, the five year investment result worked out poorly, with an annualized rate of return of -2.27%. This would have turned a $10K investment made 5 years ago into $8,915.37 today (as of 11/18/2025). On a total return basis, that’s a result of -10.83% (something to think about: how might CRM shares perform over the next 5 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
Notice that Salesforce Inc paid investors a total of $2.85/share in dividends over the 5 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 1.664/share, we calculate that CRM has a current yield of approximately 0.71%. Another interesting datapoint we can examine is ‘yield on cost’ — in other words, we can express the current annualized dividend of 1.664 against the original $264.65/share purchase price. This works out to a yield on cost of 0.27%.
One more piece of investment wisdom to leave you with:
“If you’re looking for a home run, a great investment for five years or 10 years or more, then the only way to beat this enormous fog that covers the future is to identify a long-term trend that will give a particular business some sort of edge.” — Ralph Wanger
