Dividends play an important role in the total return of an equity investment. Dividend’s role is especially powerful over the long-term due to the power of compounding. The following two charts show how much dividends are critical using the example of the S&P 500 index. I have posted these charts before but these are the updated ones with 2022 data.
1.S&P 500 Total Return vs Price Return 1960 to 2022:
2.Dividends’ Contribution to SP 500 Total Return by Decade:
Source: The Power of Dividends: Past, Present, and Future, Hartford Funds
Related ETFs:
Disclosure: No positions
