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Comparing the value of a stock market index at two arbitrary points is not a good analysis. Here are some reasons why - does this include dividends? Are the di

Comparing the value of a stock market index at two arbitrary points is not a good analysis. Here are some reasons why - does this include dividends? Are the dividends reinvested? Does this include ongoing contributions in the interim, perhaps at times when the index was down, now leading to an increase in value?

roflyear 4y ago
Generally it would include dividends in their returns, yeah. However, unless your adjusting the size of the position when the dividend was paid, these analysis would not reinvest the dividends. Absolutely doesn't include ongoing contributions, I think that is the big thing. It is rare to just buy a stock or ETF and hold it for 20 years... usually people are buying more or selling the position during that period.
- cpncrunch 4y ago
  No, those figures are just the Dow Jones index at those dates, it doesn't include dividends. You can use this site to calculate total return with dividends reinvested: https://dqydj.com/dow-jones-return-calculator/ https://dqydj.com/dow-jones-return-calculator/ Plugging in those dates gives 0.078% return without reinvesting dividends (basically the figures given in the parent comment), 4.632% with dividends reinvested, and -1.941% with dividends reinvested and taking CPI into account. So, you still come out negative due to inflation, even after reinvesting the dividends.
  - lotsofpulp 4y ago
    But no credible investment advice in the last many decades has suggested investing in DJIA.
- eldaisfish 4y ago
  I am almost 100% certain that the figures you quoted are solely the index values. Dividends are not part of the index values and never have been. Zero change in index value over any period of time does not necessarily imply zero growth, especially when the time frame involved is over a decade.
  - roflyear 4y ago
    I didn't quote anything, and I specified when looking at returns.

roflyear 4y ago

Generally it would include dividends in their returns, yeah. However, unless your adjusting the size of the position when the dividend was paid, these analysis would not reinvest the dividends. Absolutely doesn't include ongoing contributions, I think that is the big thing. It is rare to just buy a stock or ETF and hold it for 20 years... usually people are buying more or selling the position during that period.

cpncrunch 4y ago
No, those figures are just the Dow Jones index at those dates, it doesn't include dividends. You can use this site to calculate total return with dividends reinvested: https://dqydj.com/dow-jones-return-calculator/ https://dqydj.com/dow-jones-return-calculator/ Plugging in those dates gives 0.078% return without reinvesting dividends (basically the figures given in the parent comment), 4.632% with dividends reinvested, and -1.941% with dividends reinvested and taking CPI into account. So, you still come out negative due to inflation, even after reinvesting the dividends.
- lotsofpulp 4y ago
  But no credible investment advice in the last many decades has suggested investing in DJIA.
eldaisfish 4y ago
I am almost 100% certain that the figures you quoted are solely the index values. Dividends are not part of the index values and never have been. Zero change in index value over any period of time does not necessarily imply zero growth, especially when the time frame involved is over a decade.
- roflyear 4y ago
  I didn't quote anything, and I specified when looking at returns.