3-Year Backtest: Buy and Hold MSFT (Microsoft Corporation)

This analysis evaluates a buy-and-hold strategy over the past 3 years, providing a historical perspective on MSFT's performance from 2022-11-07 to 2025-11-06.

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 MSFT on 2022-11-07, at a price of $222.34 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 2025-11-06, the price of MSFT had risen to $497.10. While we didn't sell, we can still assess the performance by calculating the current value of the investment: $22,357.75 — a total gain of 123.58%.

This translates into an annualized return of 30.78% over the entire period. The return is outstanding and far exceeds typical market returns. Such performance usually reflects an unusually favorable period or a high-risk, high-reward asset.

Drawdown and Risk

The maximum drawdown recorded during this period was 23.73%. This drawdown began after a peak price of $463.24 on 2024-07-05, and reached its lowest point on 2025-04-08 when the price fell to $353.33. The drawdown lasted for 277 days.

The drawdown was relatively small, suggesting the asset or strategy maintained reasonable stability through market fluctuations. The maximum drawdown lasted over six months, suggesting a sustained downturn or persistent volatility. These periods can shake investor confidence and demand discipline.

The Calmar Ratio — annualized return divided by maximum drawdown — was 1.30, reflecting the tradeoff between return and volatility.

This is an excellent risk-adjusted return. A Calmar Ratio of 1.0 or higher is rare and indicates that the strategy generated strong returns relative to its worst drawdown.