Same amount but different results – Investing Example

I was reading a book “The Intelligent Investor” by Benjamin Graham. And in that book there was this very good example about 10 year investment and how to get different results even when investing the same amount…

…Let’s get to the example

#1 Example:

$12 000 —INVESTED—> SP500 +10 YEARS -> $7 223

  • This is if one time investment was made into SP 500 in September 1929
  • Hold for 10 years
  • Portfolios worth after 10 years $7 223
  • Loss $4 777
  • SP500 – Standard & Poor’s 500 Stock Index

#2 Example:

$100/month —INVESTED—> SP500 + 10 YEARS -> $15 571

  • This is if monthly investment worth $100 was made into SP 500 starting September 1929
  • Regular $100 investments for 10 years every month
  • Porfolio worth after 10 years $15 571
  • Gain $3 571

These results show the power of diciplined buying. This period included great depression and the worst bear market.

 

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