The U.S. equity market as represented by the S&P 500 has performed very well this year with a return of 17.2% so far based on price return only. When dividends are included the returns will be a bit slightly higher. The returns on the index over the 5 and 10 year period is also very …
The current dividend yield of the S&P 500 is 1.90%. The yield has hovered around 2% for many years now. Since the 1990s the dividend yield has declined consistently year over year to reach the current low rates. The following chart shows the dividend yield since 1870: Click to enlarge Source: multipl.com However though the …
Continue reading ‘Why Dividend Reinvestment is Important Even When the Yield is Low’ »
In the equity market, the only thing that is constant is change. To put it another way, today’s winner could be tomorrow’s loser. So investors have to be cautious in betting too much on one company or sector with plans to hold them for the long term measured in decades or forever. For example, some …
Continue reading ‘One Decade’s Winner Could Become Next Decade’s Loser’ »
The S&P 500 is up by 19.59% year-to-date based on price only. However based on total return which includes dividend reinvestment the return is 21.36% so far this year. In the past few years the dividend yield on the index is around 2%. Though the yield is small, the difference between the price return and …
Continue reading ‘S&P 500 Price vs. Total Return Over 5 Years: Chart’ »
The enemy of the average individual investor is no one but himself. The average investor underperforms over almost every other asset class in terms of returns over the long run. This is because investors get distracted by a variety of things that are detrimental to their returns. Some of the things that retail investors do …
Continue reading ‘Average Investors Underperform Most Asset Classes’ »