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Is S&P500 [Total Return Index] the highest ROI yield there is?
I am not speaking about the S&P500, aka the daily price change in the chart of the index, but specifically speaking about the more hidden Total Return Index that most people don't know about. Aka I believe this index is DRIP or IMMEDIATE reinvestment of dividends right back into the index.
If this index is not the highest yield, what else is the HIGHEST yield over the longest investment time frame? aka 30 / 35 / 40 / 45 years.
Thank you very much and I hope this makes sense.
I'm not sure I understand what you are asking. Are you asking which index has had the higest return or are you asking about a specific ETF/MF? Your returns will be higher if you reinvest the dividends.
Is this question looking backward or forward? That is, you're looking for one of two things:
1. Looking back: which ETF has had the best performance (highest yield) in the last 30/35/40/45 years? Answer: the one you're showing looks pretty good, but there's so many funds out there that finding the best without a lot of number crunching will be difficult. You also have to factor in funds that haven't had that long of a lifespan -- are we ignoring any funds that haven't had a lifespan of at least 30 years, or extrapolating what returns would have been if it had been (even more number crunching)?
2. Looking forward: you want to know what fund to dump money into so you can max your retirement in 30+ years. Impossible to answer. If anyone could answer that, they would have already taken Warren Buffet up on his March Madness $1 billion challenge and collected.
EDIT: There might also be a third thing you're asking here: which index is the best indicator of growth (S&P vs Dow, for example), in which case the number crunching is reduced significantly looking backward and still impossible to answer looking forward.
I can tell you if you would have gone in with a tech index fund like FNGU and invested at the bottom of the market the return would be 770%since March.
From that perspective a 998% return since 1990 isn't all that impressive when leading tech stocks have done that over the last 5.
Historically speaking dividend paying stocks have done better over the long term than straight equity plays which is I think the difference between that fund and the S&P.
That might hold true going forward hard for me to say. I am not so sure dividends will stay as they are TBH in the future and ultimately more higher growth stocks without dividends are starting to find their ways into the main index anyway.
Total market cap to GDP is currently around 173%. Historically, that's very high.
High broad market returns of the last few decades may lead to low broad market returns in the future.
If people from the 1970's or 1980's could see our market valuations, they might say we were nuts to be so optimistic about growth, and that the need for a respectable dividend yield should keep many stock prices in check.