“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 Intel Corp (NASD: INTC)? Today, we examine the outcome of a five year investment into the stock back in 2020.
| Start date: | 08/07/2020 |
|
|||
| End date: | 08/06/2025 | ||||
| Start price/share: | $48.03 | ||||
| End price/share: | $20.41 | ||||
| Starting shares: | 208.20 | ||||
| Ending shares: | 232.01 | ||||
| Dividends reinvested/share: | $4.30 | ||||
| Total return: | -52.65% | ||||
| Average annual return: | -13.89% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $4,734.43 | ||||
As we can see, the five year investment result worked out poorly, with an annualized rate of return of -13.89%. This would have turned a $10K investment made 5 years ago into $4,734.43 today (as of 08/06/2025). On a total return basis, that’s a result of -52.65% (something to think about: how might INTC shares perform over the next 5 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
Notice that Intel Corp paid investors a total of $4.30/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 .5/share, we calculate that INTC 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 .5 against the original $48.03/share purchase price. This works out to a yield on cost of 5.10%.
Here’s one more great investment quote before you go:
“The emotional burden of trading is substantial; on any given day, I could lose millions of dollars. If you personalize these losses, you can’t trade.” — Bruce Kovner
