“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 Alexion Pharmaceuticals Inc. (NASD: ALXN)? Today, we examine the outcome of a five year investment into the stock back in 2016.
| Start date: | 02/24/2016 |
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| End date: | 02/23/2021 | ||||
| Start price/share: | $141.97 | ||||
| End price/share: | $152.93 | ||||
| Starting shares: | 70.44 | ||||
| Ending shares: | 70.44 | ||||
| Dividends reinvested/share: | $0.00 | ||||
| Total return: | 7.72% | ||||
| Average annual return: | 1.50% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $10,773.28 | ||||
As we can see, the five year investment result worked out as follows, with an annualized rate of return of 1.50%. This would have turned a $10K investment made 5 years ago into $10,773.28 today (as of 02/23/2021). On a total return basis, that’s a result of 7.72% (something to think about: how might ALXN shares perform over the next 5 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
Here’s one more great investment quote before you go:
“The whole secret to winning big in the stock market is not to be right all the time, but to lose the least amount possible when you’re wrong.” — William O’Neil
