The Intelligent Investor - The Definitive Book On Value Investing

anyone else can. The knowledge of how little you can know about the
future, coupled with the acceptance of your ignorance, is a defensive
investor’s most powerful weapon.

132 Commentary on Chapter 5

FIGURE 5-1

Every Little Bit Helps

$4,604.53

$3,100.00

879.82

1469.25

0

1,000

2,000

3,000

4,000

5,000

6,000

Dec-99Feb-00Apr-00Jun-00Aug-00Oct-00Dec-00Feb-01Apr-01Jun-01Aug-01Oc

t-01

Dec-01Feb-02Apr-02Jun-02Aug-02Oct-02Dec-02

Cumulative value of $100 invested monthly in Vanguard 500 Index Fund

Monthly closing price, Standard & Poor’s 500-stock index

From the end of 1999 through the end of 2002, the S & P 500-stock average fell
relentlessly. But if you had opened an index-fund account with a $3,000 mini-
mum investment and added $100 every month, your total outlay of $6,600
would have lost 30.2%—considerably less than the 41.3% plunge in the market.
Better yet, your steady buying at lower prices would build the base for an explo-
sive recovery when the market rebounds.

Source: The Vanguard Group