We include dividends.
32.39% was the S&P 500 return for 2013, not the 29.60% you'll see quoted on tons of other sites.
We told you last year, but we'll obnoxiously repeat the lesson once again: dividends matter. While every other web site on the internet gives you the price returns of the S&P 500, we do the extra step and tell you both types of returns: price returns and dividend reinvestment returns.
2013 S&P 500 Total Returns
2013 S&P 500 Dividend Reinvestment and Price Index Return (Marketwatch)
Dividend reinvested returns in green, index returns in orange.
We've heard plenty of arguments to the contrary, but they all fail for the same general reason: it makes no sense to consider index returns without doing something with the dividends. Yes, SPXT isn't a perfect comparison (it ignores taxes and trading fees to list two issues), but it's vastly superior to ignoring dividends altogether.
So, once again, when you look at the S&P 500, please use the S&P 500 Total Return Index, graciously provided by S&P to fix this commonly made error. For longer time frames, Don't Quit Your Day Job has a S&P 500 Reinvestment Calculator which uses Robert Shiller's data back to 1871 (and, hilariously enough, covers times when the S&P "500″ wasn't 500).
|1/2/2013 Open||12/31/2013 Close||Annual Return|
|S&P 500 Total Return||2504.45||3315.59||32.39%|
|S&P 500 Price Return||1426.19||1848.36||29.60%|
Don't believe that the 2.79% makes a difference? I'd strongly suggest you heed our advice: dividends matter.
Take a look at our calculator - a 65-year-old investor who started investing in January, 1973 and sold in November, 2013 (we have data through mid-November so far) saw a solid 1416.765% in index price returns, 6.886% a year. Of course, dividend reinvestment put said investor at 5020.207%… 10.118% a year.
Still don't care? (Yes, we realize that you could also make a case for removing inflation - DQYDJ has a daily inflation calculator which does the interpolation. Our estimate? $10,000.00 on 1/1/2013 would be worth $9,958.06 today. Go do the algebra if you want to factor it in.)