What Have You Done for Me Lately?

Ryan Bushell - June 23, 2015

All three major US equity market indices hit new all-time highs last month while the Canadian market remains stubbornly below its all-time high set last August following a sharp downturn in oil prices. As we have detailed before while share prices and the widely quoted equity market indices based on them make for great headlines, they are only half the story when it comes to an investor’s long term total return since they ignore dividends. The two charts below detail the difference between the total return indices and the more popular price only indices quoted in the daily headlines. As you can see while share prices have gone on round trips (2000 – 2013 for the S&P 500 and 2008 – 2014 for the S&P TSX Composite) the total return indices have ground steadily higher.

Charts 1 and 2 – Benchmark Price vs. Total Return Comparisons since 2000

TSX Price vs Total Return - Indexed to the same value as at Dec 31-99

SP Price vs Total Return - Indexed to the same value as at Dec 31-99

 

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