News · Yahoo Finance

The S&P 500 Rose 30-Fold Since 1988. Reinvested Dividends Made It 67-Fold.

A $10,000 stake in the S&P 500 at the close on Jan. 4, 1988, grew to about $300,000 by the Oct. 26 close on price alone, a gain of about 9.2% a year. With all dividends reinvested, the same stake reached roughly $673,000, or about 11.5% a year. The gap was small at first but widened after 2018, when the reinvested stake was about $195,000 versus $98,000 for price only. An investor who took dividends as cash ended with about $349,000, a bit more than half the reinvested result. The author believes reinvesting still makes sense for money that doesn't need to pay bills, though dividends added only about 1.3 points to the index's return over the past 12 months.

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