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Author: MadCapitalist Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 214649  
Subject: Updated Know-Nothing Investor Analysis Date: 3/3/2009 8:15 PM
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Recommendations: 34
I have updated my Know-Nothing Investor analysis through 2008. I also changed the annual expense ratio to 0.15%, which is the approximate expense ratio on the Vanguard 500 Index Fund Investor Shares.

This analysis tests a "dumb money" strategy of investing $1,000 at the beginning of each year in an S&P 500 Index fund and reinvesting the dividends. Like that stupid infomercial says, "you just set it and forget it." This is the actual return you would have achieved based on historical results for various holding periods. For some background on this analysis, read here:
http://boards.fool.com/Message.asp?mid=25236786

It really is amazing the type of results you can achieve using no brainpower just by being consistent and patient.

Keep in mind, however, that the S&P 500 has dropped 22.9% since 12/31/08. Even so, discounting the values by 22.9% would still lead to impressive long-term results relative to the amounts invested.

Investment     $60,000    $55,000    $50,000    $45,000    $40,000   $35,000   $30,000   $25,000   $20,000   $15,000   $10,000   $5,000
Year 60-years 55-years 50-years 45-years 40-years 35-years 30-years 25-years 20-years 15-years 10-years 5-years
1926 4,116,272 2,081,601 1,086,573 930,260 790,390 423,177 273,560 90,677 51,992 19,459 14,464 5,273
1927 4,567,834 1,853,724 1,260,909 996,173 665,580 503,268 273,225 105,962 45,102 16,494 18,357 2,694
1928 4,514,619 2,114,694 1,099,321 1,113,567 775,426 431,423 229,123 118,391 45,319 19,341 11,193 2,687
1929 5,024,721 2,469,073 1,116,546 905,227 820,756 505,303 313,784 112,229 46,229 24,036 14,678 4,889
1930 6,378,127 2,532,704 1,277,167 642,344 724,963 568,658 339,665 166,476 53,910 28,656 14,695 5,258
1931 5,931,901 3,216,909 1,625,852 847,759 724,778 614,763 328,264 211,219 69,185 38,501 13,254 8,364
1932 7,326,880 3,605,625 1,462,477 993,811 784,062 522,988 394,496 213,242 81,889 33,906 11,543 10,979
1933 7,099,558 3,414,587 1,598,535 830,028 839,343 583,321 323,592 170,996 87,429 32,460 12,866 5,990
1934 6,865,292 3,507,020 1,722,139 777,650 628,945 568,775 348,890 215,335 76,029 30,209 14,406 6,618
1935 6,331,799 4,199,682 1,666,455 839,062 420,783 473,404 369,808 219,368 106,156 33,138 16,070 5,936
1936 7,836,951 3,660,635 1,983,707 1,000,933 520,299 443,022 373,944 198,120 125,738 39,715 20,002 4,747
1937 8,920,557 4,420,678 2,173,857 880,303 596,370 468,440 310,810 232,644 123,987 46,069 17,246 4,174
1938 11,173,543 4,469,578 2,148,306 1,004,368 520,036 523,675 362,183 199,464 104,085 51,788 17,659 5,413
1939 12,943,008 4,428,199 2,260,753 1,108,792 499,364 402,074 361,859 220,452 134,494 46,304 17,054 6,499
1940 14,347,954 4,108,067 2,723,263 1,079,364 542,141 270,622 302,912 235,039 137,839 65,276 19,061 7,540
1941 11,833,926 5,126,665 2,393,358 1,295,629 652,253 337,589 285,814 239,576 125,504 78,043 23,272 9,681
1942 9,252,528 5,601,103 2,774,115 1,362,663 550,461 371,192 289,619 190,597 140,944 73,418 25,775 7,807
1943 6,173,935 6,403,307 2,559,707 1,228,743 572,889 294,923 294,439 201,595 109,323 55,494 25,906 6,910
1944 6,845,668 7,093,177 2,425,105 1,236,422 604,669 270,635 215,605 191,792 114,885 68,049 21,871 6,241
1945 6,620,226 7,488,020 2,142,462 1,418,224 560,421 279,687 137,891 152,211 115,913 65,773 29,140 6,617
1946 6,094,496 5,969,977 2,584,668 1,204,769 650,275 325,223 166,224 138,366 113,551 57,398 33,309 7,850
1947 6,334,656 4,719,802 2,855,533 1,412,219 691,712 277,644 184,944 141,713 91,167 65,097 31,592 8,989
1948 5,854,230 3,219,013 3,336,719 1,331,931 637,594 295,509 150,207 147,073 98,359 51,375 24,257 9,267
1949 3,191,786 3,589,324 3,716,668 1,268,924 645,181 313,691 138,614 107,975 93,629 53,952 29,697 7,769
1950 N/A 3,397,876 3,840,250 1,097,251 724,269 284,473 140,126 67,311 72,075 52,569 27,452 9,925
1951 N/A 3,050,524 2,985,319 1,290,830 599,796 321,800 158,770 79,002 63,318 49,407 22,733 10,541
1952 N/A 3,080,451 2,292,575 1,385,310 682,938 332,425 131,553 85,211 62,511 37,923 24,482 9,194
1953 N/A 2,864,742 1,573,305 1,628,820 648,135 308,361 141,026 69,609 64,999 40,863 19,102 6,860
1954 N/A 1,598,362 1,795,333 1,856,476 631,959 319,453 153,385 65,880 48,680 39,549 20,383 8,568
1955 N/A N/A 1,733,424 1,956,055 557,364 365,818 141,937 68,039 30,855 30,683 19,849 7,658
1956 N/A N/A 1,641,317 1,603,571 691,848 319,724 169,733 81,710 38,623 28,574 19,711 6,685
1957 N/A N/A 1,744,635 1,296,225 781,799 383,576 184,941 71,585 44,271 29,999 16,067 7,810
1958 N/A N/A 1,685,864 924,334 955,325 378,486 178,531 80,107 37,826 32,634 18,190 6,375
1959 N/A N/A 952,193 1,067,830 1,102,126 373,655 187,363 88,377 36,385 24,634 17,618 6,770
1960 N/A N/A N/A 1,089,517 1,227,138 348,505 227,148 86,795 40,151 16,751 14,670 7,191
1961 N/A N/A N/A 1,054,345 1,028,037 442,357 203,066 106,392 49,613 21,804 14,103 7,342
1962 N/A N/A N/A 1,118,896 829,502 499,096 243,345 115,855 43,493 25,094 14,770 5,829
1963 N/A N/A N/A 1,095,338 599,251 617,957 243,413 113,496 49,591 21,905 16,422 6,833
1964 N/A N/A N/A 630,830 706,016 726,961 245,191 121,670 56,046 21,716 12,675 6,712
1965 N/A N/A N/A N/A 723,716 813,043 229,852 148,371 55,470 24,308 8,739 5,573
1966 N/A N/A N/A N/A 705,928 686,409 294,262 133,820 68,795 30,561 11,820 5,513
1967 N/A N/A N/A N/A 762,641 563,781 338,143 163,507 76,522 27,500 14,175 6,099
1968 N/A N/A N/A N/A 740,065 403,673 414,989 162,151 74,370 31,232 12,327 6,668
1969 N/A N/A N/A N/A 433,080 483,375 496,104 166,141 81,246 36,151 12,690 5,317
1970 N/A N/A N/A N/A N/A 499,625 559,367 157,165 100,111 36,279 14,603 3,831
1971 N/A N/A N/A N/A N/A 482,334 467,172 199,224 89,382 44,667 18,334 5,413
1972 N/A N/A N/A N/A N/A 512,041 376,865 224,924 107,346 48,854 16,250 6,495
1973 N/A N/A N/A N/A N/A 497,175 269,963 276,225 106,594 47,620 18,681 5,779
1974 N/A N/A N/A N/A N/A 290,210 322,522 329,315 109,030 52,040 21,778 6,168
1975 N/A N/A N/A N/A N/A N/A 324,740 361,393 100,439 62,448 21,303 7,028
1976 N/A N/A N/A N/A N/A N/A 293,419 281,938 118,926 51,836 24,281 8,003
1977 N/A N/A N/A N/A N/A N/A 300,119 218,798 129,179 59,854 25,457 6,736
1978 N/A N/A N/A N/A N/A N/A 282,838 151,971 153,775 57,568 24,015 7,605
1979 N/A N/A N/A N/A N/A N/A 155,081 170,383 171,562 55,012 24,417 8,183
1980 N/A N/A N/A N/A N/A N/A N/A 162,463 177,692 47,803 27,501 7,406
1981 N/A N/A N/A N/A N/A N/A N/A 147,057 138,428 56,715 22,747 8,487
1982 N/A N/A N/A N/A N/A N/A N/A 150,071 106,881 61,389 26,227 8,890
1983 N/A N/A N/A N/A N/A N/A N/A 135,679 70,960 69,702 23,907 7,808
1984 N/A N/A N/A N/A N/A N/A N/A 73,740 78,804 76,604 22,496 7,790
1985 N/A N/A N/A N/A N/A N/A N/A N/A 75,976 79,787 19,749 8,875
1986 N/A N/A N/A N/A N/A N/A N/A N/A 68,408 61,311 23,285 7,116
1987 N/A N/A N/A N/A N/A N/A N/A N/A 69,549 46,822 25,009 8,182
1988 N/A N/A N/A N/A N/A N/A N/A N/A 64,778 31,929 29,196 7,690
1989 N/A N/A N/A N/A N/A N/A N/A N/A 35,634 35,902 32,119 7,264
1990 N/A N/A N/A N/A N/A N/A N/A N/A N/A 34,763 33,133 6,381
1991 N/A N/A N/A N/A N/A N/A N/A N/A N/A 32,601 26,203 8,066
1992 N/A N/A N/A N/A N/A N/A N/A N/A N/A 33,039 19,590 8,515
1993 N/A N/A N/A N/A N/A N/A N/A N/A N/A 31,158 13,421 9,989
1994 N/A N/A N/A N/A N/A N/A N/A N/A N/A 17,463 15,443 10,905
1995 N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A 15,089 10,862
1996 N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A 13,626 7,597
1997 N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A 14,193 5,533
1998 N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A 13,673 3,796
1999 N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A 8,122 4,926
2000 N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A 5,494
2001 N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A 5,878
2002 N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A 6,775
2003 N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A 6,778
2004 N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A 3,747
2005 N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A
2006 N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A
2007 N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A
2008 N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A



Investment $60,000 $55,000 $50,000 $45,000 $40,000 $35,000 $30,000 $25,000 $20,000 $15,000 $10,000 $5,000
Years 60-years 55-years 50-years 45-years 40-years 35-years 30-years 25-years 20-years 15-years 10-years 5-years
Minimum 3,191,786 1,598,362 952,193 630,830 420,783 270,622 131,553 65,880 30,855 16,494 8,122 2,687
Maximum 14,347,954 7,488,020 3,840,250 1,956,055 1,227,138 813,043 559,367 361,393 177,692 79,787 33,309 10,979
Mean 7,315,853 3,906,383 2,065,836 1,148,841 694,310 435,170 271,193 158,235 85,327 42,768 19,584 6,983
Median 6,499,176 3,589,324 1,889,520 1,097,251 674,259 423,177 278,199 151,971 77,663 39,549 18,871 6,833
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