3 ms·
True, but the dividend, even reduced, buys you more stock when the market is down. Stocks generally have done well long term.
by lsiebert 6y ago
True, but the dividend, even reduced, buys you more stock when the market is down. Stocks generally have done well long term.
- disgruntledphd2 6y agoThis is actually only true for the US, other mature markets (such as the UK) have not shown this pattern (look at FTSE 100 returns if you don't believe me). Additionally, sixty years ago, the UK markets were the largest in the world, and I suspect that an indexing strategy would have done well during the height of the British Empire.
- lsiebert 6y agoI honestly am not sure where to look for dividend reinvestment for ftse 100 returns, so I guess I'll take your word for it, but I know that the european and london exchanges haven't done as well as the US. What metric are you using to say largest in 1960 though? Not disagreeing, just curious.
- disgruntledphd2 6y ago1960 was just something I pulled out of my ass, to be honest. I think what I was getting at was that the markets for the dominant power tend to provide above inflation returns, which for the UK is probably pre WW2, to be honest.