If you fled Wall Street eight years ago ”” remember Y2K? ”” and came back today, you might conclude that nothing much happened while you were gone.
The Standard & Poor’s index of 500 stocks ended the last decade at 1469.25. Now, points out Howard Silverblatt of S.&P., it is at 1468.36. A decline of less than one point in eight years is not impressive.
Proper evaluation of this investment’s return requires you to take into account dividends paid out by these 500 companies over this period. I don’t think these are reflected in the index.
The dividend yield for the S&P;500 is less than 2% per year: hardly anything to crow about.
standard – and poor. Yep.
Fortunately, there are other investment options besides funds indexed to the S & P. I’m looking at retirement in about 4 years, and the aggregate of funds (401K, defined contribution pension, & non-contributory profit sharing trust) has more than doubled since Y2K – – and my investment options are fairly risk-averse at this point.
I’m not sure the snippet above is fair. Adjusted for dividends, an investor who bought SPY in Jan 2000 and held through Dec 2007 would have earned an 18% return (total), 2.4% compound annual (not much, but better than what’s implied in the snippet). An investor would invested a constant dollar amount each month over the same period would have earned 32.1% total or 4.1% compounded (again, adjusted for dividends). To be sure, these are not great returns, particularly when risk- and inflation-adjusted.