5-Year Backtest: Buy and Hold CRM (Salesforce, Inc.)

This analysis evaluates a buy-and-hold strategy over the past 5 years, providing a historical perspective on CRM's performance from 2020-07-06 to 2025-07-03.

Note: This simulation uses adjusted close prices, meaning all historical prices have been retroactively adjusted for splits and dividends. To achieve similar results in practice, you would need to reinvest all dividends automatically as they are paid.

Performance Overview

Starting with an initial capital of $10,000.00, we purchased shares of CRM on 2020-07-06, at a price of $196.00 per share (adjusted for splits and dividends). No trading, no adjustments — just a simple buy-and-hold approach.

We held the position continuously through every market twist and turn, never selling. As of 2025-07-03, the price of CRM had risen to $272.15. While we didn't sell, we can still assess the performance by calculating the current value of the investment: $13,885.03 — a total gain of 38.85%.

This translates into an annualized return of 6.80% over the entire period. This return is modest — positive, but below the long-term averages of broad-market investments. It may reflect a conservative strategy or a challenging market period.

Drawdown and Risk

The maximum drawdown recorded during this period was 58.62%. This drawdown began after a peak price of $307.27 on 2021-11-08, and reached its lowest point on 2022-12-16 when the price fell to $127.16. The drawdown lasted for 403 days.

The drawdown was substantial, though not uncommon for long-term equity strategies that span full market cycles. This level suggests exposure to significant corrections or crashes. The maximum drawdown lasted over a year, indicating an extended period of underperformance. This duration is typical of major corrections or bear markets.

The Calmar Ratio — annualized return divided by maximum drawdown — was 0.12, reflecting the tradeoff between return and volatility.

The return-to-risk efficiency is weak — drawdowns were relatively large compared to the returns achieved.