“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 (NYSE: CRM)? Today, we examine the outcome of a five year investment into the stock back in 2020.
| Start date: | 10/16/2020 |
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| End date: | 10/15/2025 | ||||
| Start price/share: | $258.55 | ||||
| End price/share: | $236.58 | ||||
| Starting shares: | 38.68 | ||||
| Ending shares: | 39.09 | ||||
| Dividends reinvested/share: | $2.85 | ||||
| Total return: | -7.52% | ||||
| Average annual return: | -1.55% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $9,248.66 | ||||
The above analysis shows the five year investment result worked out poorly, with an annualized rate of return of -1.55%. This would have turned a $10K investment made 5 years ago into $9,248.66 today (as of 10/15/2025). On a total return basis, that’s a result of -7.52% (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 0.70%. 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 $258.55/share purchase price. This works out to a yield on cost of 0.27%.
More investment wisdom to ponder:
“The person who starts simply with the idea of getting rich won’t succeed; you must have a larger ambition.” — John Rockefeller
