Tuesday, September 21, 2010

Dividends Matter

Here are some interesting return numbers when looking at where to put your money:

Year to Date, the S&P 500 is up 0.94% excluding dividends but is up 2.42% including dividends.

Over a one-year time period, market fluctuations account for 80% of returns but over a five-year time horizon, dividend yield and growth account for almost 80% of returns.

Ned Davis Research produced the following return figures: Since December 31, 1929, $100 invested in S&P 500 price only index grew to $4,989. That same $100 invested in the S&P 500 total return index grew to $177,774!

Since 12/31/1929, 95.8% of returns in the S&P 500 are accounted for by dividends and their reinvestment into the index.

Moral of the story, Paid To Wait stocks should be a part of every investor's portfolio.

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