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It should be noted that the chart shows s&p 500 which does not include dividends. Real returns are higher when dividends are accounted for.
by erl 10y ago
It should be noted that the chart shows s&p 500 which does not include dividends. Real returns are higher when dividends are accounted for.
- BeetleB 10y agoIndeed. Reinvestment of dividends makes a big difference. I made similar plots here: http://blog.nawaz.org/posts/2015/Dec/pay-down-mortgage-or-invest/ http://blog.nawaz.org/posts/2015/Dec/pay-down-mortgage-or-in...
- FabHK 10y agoVery good point. While there are total return (i.e. with dividends re-invested) and net total return (i.e. with dividends partially re-invested, as if after tax) versions of the S&P 500, they're almost never quoted. The German DAX is the only major index I can think of that's primarily quoted as a total return index.
- FabHK 10y agoNote that they do include dividends though, according to the legend. So probably using the total return or net total return index.
- erl 10y agoIndeed, I stand corrected. I missed that part. I thought the returns were too low to include dividends, but that must me the inflation adjustment tricking me.