The S&P 500 Total Return Index (1936)

In addition to the S&P 500, the index provider also has an S&P 500 Total Return Index. It’s the same as the S&P 500 but dividends are reinvested.

The S&P 500 Total Return Index closed 2020 at 7,759.35. I believe that that index starts in 1987. Since the S&P 500 is currently at 3,756.07, that means that dividends have more than doubled the return of the index over that time. That comes out to a gain of 2.2% per year from dividends. Over the long haul, dividends really do make a big difference.

The S&P 500 also has an S&P 500 Total Return Index that has 1936 as a base. That actually goes back to before the S&P 500 had 500 stocks. That didn’t happen until 1957.

For reasons I can’t imagine, you can find this index quoted at Morningstar. Let’s dig in.

If you had started investing on March 31, 1936 and had reinvested your dividends, through Thursday, you would have registered a gain of 543,755.05%.

That was enough to turn $10,000 into more than $54 million. (I hate those kinds of stats.)

The return works out to 10.68% per year. That’s enough to double your month every six years and ten months.

Posted by on January 2nd, 2021 at 10:20 pm


The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.