John Bogle was recently on Nightly Business Report. He indicated that about half of the historic 10% return from the stock market was from dividend income:
So I think we can move toward more normal returns in the stock market now for some very fundamental reasons. First the dividend yield, an important part of long- term stock market returns. In fact, in the long-term the stock market return of 9.5 percent is a 4.5 percent dividend yield and 5 percent earnings growth.
How do tech stocks--most of which don't pay dividends--fit into this rate of historic return? I am not sure, but the year 2000 tech bubble and collapse has probably wrecked many stock market stat sheets, or at least made them more difficult to create. One thing's for sure, though--it's hard for large cap, established companies to argue against dividends. Companies like Oracle (NYSE:ORCL) and Google (NASDAQ:GOOG) are going to have a difficult time encouraging buy-and-hold investors if they refuse to pay shareholders a dividend.