5-Year Backtest: Buy and Hold NFLX (Netflix, Inc.)

This analysis evaluates a buy-and-hold strategy over the past 5 years, providing a historical perspective on NFLX'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 NFLX on 2020-07-06, at a price of $493.81 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 NFLX had risen to $1,297.18. While we didn't sell, we can still assess the performance by calculating the current value of the investment: $26,268.81 — a total gain of 162.69%.

This translates into an annualized return of 21.35% over the entire period. This is a very strong return — significantly above what is commonly seen in broad-market performance. It often signals a well-timed entry into a high-growth phase.

Drawdown and Risk

The maximum drawdown recorded during this period was 75.95%. This drawdown began after a peak price of $691.69 on 2021-11-17, and reached its lowest point on 2022-05-11 when the price fell to $166.37. The drawdown lasted for 175 days.

The drawdown was very large, indicating high sensitivity to adverse market conditions. Strategies with this profile may offer strong upside but require enduring deep declines. The maximum drawdown lasted over three months, often seen in deeper corrections or extended periods of market stress.

The Calmar Ratio — annualized return divided by maximum drawdown — was 0.28, reflecting the tradeoff between return and volatility.

This level is typical for diversified investments that face substantial drawdowns alongside steady long-term returns.