The Intelligent Investor: Dollar Cost Averaging
The Intelligent Investor, written by Benjamin Graham, is the definitive book on value investing. In this video series, from one to twenty four, we will supply guidance in the adoption and execution of investment policy. Still, comparatively little will be said here about the technique of analyzing securities. Attention will be paid cheaply to investment principles and investors attitudes.
To invest intelligently in securities you should be armed with adequate knowledge of have various types of bonds and stocks behaved under varying conditions. No statement is more true or better applicable to Wall Street than this one: "Those who do not remember the past are condemned to repeat it!". This series is directed to investors. This is not how to make a million today, there are no sure ways to riches in Wall Street or anywhere else.
In nineteen twenty nine, John J. Prescott, a most important figure on Wall Street extolled the blessings of capitalism in an article in The Ladies Home Journal entitled "Everybody ought to be rich". This piece was that savings of only fifteen dollars per month invested in good common stocks with dividends reinvested would produce eighty thousand dollars in twenty years against total contributions of only thirty six hundred dollars. If he was right this was indeed a simple road to riches. Calculations based on assumed investment of thirty stocks that are indicating that this prescription had been followed during nineteen twenty nine to nineteen forty eight.
The investors holdings at the beginning of nineteen forty nine would have been worth about eighty five hundred dollars. This is very far from the great man's promise of eighty thousand dollars and it shows how little reliance can be placed on such optimistic forecast assurances. This record may be regarded as a persuasive argument for the principle of regular monthly purchases of strong common stocks through thick and thin, a program known as dollar cost averaging.