Total Return

See: Return. See: Rate on Return.

The financial press so easily ignores dividends and other side-element financial events that affect stock prices. You'll hear a lot of noise about the 1970s as having been "a lost decade" for investors, as the Dow or the S&P was "about the same price" in 1980 as it was in 1970.

But what about dividends? They were massive, by today's standards. They went from 4% to 6% to 8% to 9%...and, had you reinvested those divvys in the purchase of more stock, well, by 1990 or 2000, you'd have done seriously well.

So Total Return calculations take into account not just the compounding of the underlying index, but also the dividends and occasional other cash distributions that "come from nowhere"...like if a private company inside of a public market portfolio is sold for cash and that cash is distributed back out to investors, etc.

Makes the calculations more complex, but few investors are complaining.