S&P 500 Total Return For 2012: 16%

Jan 02, 2013 in Total Return

There is always confusion over this so we'll just answer it here rather than responding to a lot of emails.

The S&P 500 is a total return index  (all indexes are total return indexes).  If you want to refer to the S&P 500 without dividends --- you call this the 'S&P Cash Index' (or just 'price return') --- that is not the S&P 500 though.    SPY is the ETF version of the S&P 500 index and varies very slightly due to the nuances of an actual traded investment product on a public excange that you trade during open market hours vs an index value that is determined based on official closing prices and isn't finalized until after the close.

You don't have to take our word for it though, this is from Standard and Poors itself (we continually run reports to check our returns vs key sources, we take data integrity seriously):

 

We have a free page so that you can understand ETF distributions as many charting services have architectural issues with displaying this correctly.    Note that the vast majority of technical services were built for short-term traders, not investment managers.   Dividends might not seem important to you -- but 2-3% a year compounds into a big number over a lifetime of investing.   Moreover, there are many ETFs that pay much higher than 3% -- you need to compare investments based on the total return series.

Total Return vs Price Return Free Page

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