S&P 500 Return Calculator

Ed: (Per Shiller: As of 5/5 close.)  Note we’ve made a huge update to the code to speed it up to match our Dow Jones Return Calculator.  If you see any problems, let us know! Also! Try our individual stock Graham Number calculator or our individual stock dividend reinvestment calculator.

Below is a calculator with a benefit not seen on any other calculators I’ve seen online – one which includes dividend reinvestment.  It uses data from Robert Shiller, available here.

We also present this data from the perspective of average return over various time periods; you can find that calculator here.  A Treasury Return Calculator using the same data can be found at that link.  We also have a similar calculator based on the Dow Jones Industrial Average.  For a complete list of all our calculators, for investing and otherwise, go to this page.

The S&P 500 Dividends Reinvested Price Calculator (With Inflation Adjustment)

One issue you run into a lot when you are discussing optimal savings strategies is the inability of people discussing their returns versus the S&P 500 to produce a fair comparison. They will say, for example, that the S&P 500 index was at the same level as it was at some time in the past – so therefore investing in the index was a waste of time.  Here’s the key to this calculator:

  • S&P 500 Index Return – The total price return of the S&P 500 Index. So if it is at 1000 on the start and end date, this will be 0.
  • S&P 500 Index Annualized Return – The total price return of the S&P 500 index (as above), annualized. This number basically gives your ‘return per year’ if your time period was compressed or expanded to a 12 month timeframe.
  • S&P 500 Dividends Reinvested Index Return – The total price return of the S&P 500 if you had reinvested all of your dividends.
  • S&P 500 Dividends Reinvested Index Annualized Return – The total price return of the S&P 500 if you reinvested dividends. Again, it will annualize the return given above.
  • Inflation Adjusted (CPI)? – Whether the calculation you did is using CPI adjusted values provided by Shiller, or showing return before inflation. Hit the checkbox above the buttons to turn on or off the inflation adjustment.

Methodology

Professor Shiller lists his methodology on his site – all values internal to this tool use the values he provided.  One thing to note is that the month’s ‘Price’ isn’t the price on a particular day, but an average of closing prices based on a year’s quarter’s data.  It’s best to look at it like “what did the average investor who invested randomly during the beginning month and sold randomly during the ending month do?”.

Let me say that again in a different way: other than the most recent month, which is tied to one closing price (and listed in the editor note at the top of the page), the month DOES NOT correspond to an individual day.  It’s a guess at an average investor’s price basis (or sale price) if they bought (or sold) “at some point” in the month.

Also, important (since it comes up often in the comments): because it isn’t an individual date, that means when you’re trying to compute yearly returns, you need to be careful to pick twelve months – so, if you were interested in the annual return of 2013, you would pick Jan-2013 to Jan-2014 or Dec-2012 or Dec-2013 to get roughly 12 months.  If you want exact dates, you will have to look elsewhere, perhaps at the products S&P has on their index site.

To calculate the ‘dividend reinvested’ price index, I take the trailing twelve month dividend yield reported in any month of Shiller’s data and divide by 12 to get an approximate count of dividends paid out in the month. Using that number, I calculate how many ‘shares’ of the S&P 500 index I can buy, and run a cumulative count from 1876 to 2012. Is this completely accurate? No, but it would be nigh impossible to go back and calculate exact S&P 500 payout dates and figure out what the index was trading at on that date. Deal with it – over a long enough period the dividends will roughly balance out.

Also, transaction fees and management costs aren’t included, which would come out of a ‘real’ investor’s return.

Implications

Does it mean a lot to include reinvested dividends? Well, yes. Consider the following – in July 1999 Shiller’s data has the S&P 500 at 1380.99. In April 2012? 1386.43. If you only used the price return of the S&P 500 you’d appear to have made a .394% gain, when, dividends reinvested, it was more like a 26.253%% gain. It seems shabby, but the effect is much more pronounced over longer periods of time. Consider from January 1950 until April 2012 the return was 8,182.464% for the index price and a whopping 66226.545% for the dividends reinvested index. In short? Since 1950, roughly 89% of your gains would have come from reinvesting your dividends. Still think it’s shabby?

Thank Yous

To Robert Shiller, of course, for posting his data publicly.
To Ken Faulkenberry at Arbor Investment Planner for finding an error with the dividend calculation in an earlier version of the tool – yes, everything was off by a factor of 12 with dividends. Sorry folks, and thanks Ken for pointing it out!

Comments

  1. says

    Neat stuff PK!  I think that’s a really neat tool.  I haven’t looked at CPI data much but I’m sure a CPI weighted calculator would be really handy too.  Nice work!

    • says

      Thanks! Due to popular demand (2/2 comments), I went back and added the CPI adjustment this morning. Hope it’s useful for comparing strategies, or at least settling arguments!

  2. says

    It’s a hugely important tool, PK.

    I of course agree 100 percent that dividends need to be included. The numbers aren’t accurate if you don’t include dividends.

    Are the numbers here inflation-adjusted? I believe that Shiller uses inflation-adjusted numbers. So I am assuming they are. But I didn’t see language specifically saying that (it’s possible that I missed it), so I am not entirely sure.

    Rob

    • says

      He does, and he doesn’t, but now I’ve got both. I’ve added a checkbox to take inflation into consideration.

  3. freeby50 says

    Nice work.    Thanks for making this.

    I’ve been using the data on Yahoo finance for an S&P500 index and then simply doing the math myself.  I believe their info adjusts for dividends.   But your tool makes it simple.

    • says

      Not sure on the S&P, but Shiller’s data made it pretty easy. I just made two indices and kicked it out as XML and wrote the script.

      Let me know if you think of any other high value calculators – I want to increase the inventory on the site, haha.

  4. says

    I’ve added a checkbox to take inflation into consideration.
    That’s super, PK.

    I have a section at the home page of my blog titled “Links That Matter.” As soon as I post this comment, I will go over there and add your calculator to the other good stuff there.

    Hope it’s useful for comparing strategies, or at least settling arguments!

    My experience tells me that it will start two new arguments for every one that it settles. And that that’s a good thing!

    Rob

  5. says

    I think it’s ridiculous so many investors compare their returns with the S&P 500 in the first place. Unless your portfolio has a beta of 1 (or close to it) there’s no point anyway.

    Sadly, I saw this in many financial advisory offices. They want to compare their results to the S&P 500 when it suits them then remind people that “we aren’t competing with the S&P” when it doesn’t.

    Thinking out loud and off the cuff:  I’m wondering if indexing is creating some big problems for us, as a society. It seems like it encourages the status quo. That’s not a wholly developed thought, so don’t hold it against me when we prove it wrong in 15 minutes.

    • says

      Heh, I won’t hold anything against you Joe!

      I just like the idea of a benchmark in that it’s important to know “what if you hadn’t tried to do anything special?”. If I am beating the ‘market’ I know that my time (the time I spend is more than I would to just sink it into a market fund) is worthwhile.

  6. says

    Leave it to a programmer to try to break it…..December 1997 through December (yeah I know we aren’t there yet) 2012 returned negative 100% in all fields….maybe an entry error would help prevent idiots like me from entering unintelligent data!

    • says

      Looks like we’re in for a massive market fall?

      Sorry for the laziness. My day job wouldn’t let me get away with it; I added some boundary conditions and thanks for checking my work!

  7. Kristin says

    This is a really great tool. Thanks for making it available. I am getting a bad data result. Running a search for October 2009 through December 2009 is getting me “infinity.000% results across all fields. I’ll try coming back to it a different way and see if the result changes.

  8. Priyesh says

    Thank you so much for the tool. I use it to compare the returns hedge funds achieve!

    A really useful tool would be to have a listing of funds and hedge funds with their published monthly performance numbers. Users would then be able to select a date range and compare against the S&P 500.

    I don’t think such a tool already exists and believe other commercial sites would link to your website for such information.

  9. says

    I put Jan 2012 start date and Dec 2012 end date then hit calculate. Why would there be a 1.2% delta between “Annualized S&P 500 Return (Dividends Reinvested)” and “S&P 500 Return (Dividends Reinvested)?” What causes the delta? Great tool by the way! Thanks.

    • says

      In this case it is annualizing based on 12 months, and it’s counting the Jan-Dec time-frame is counted as 11 months. The delta is from ‘filling in’ the last month, so to speak.

  10. xxx says

    Great tool. But this calc shows annualized Div reinvested 2012 (jan-dec) as 12.557% whereas S&P shows the 2012 return to be about 16%. Why the difference?

    • says

      A couple reasons – Jan-Dec is only an 11 month period in the tool. You should try Jan-Jan or Dec-Dec for a better read.

      Additionally, Shiller’s numbers are interpolated quarter returns (and interpolated dividends), as opposed to closing numbers o specific numbers. In this case, you should trust S&P – I did the math in this post if you’re interested.

  11. Philip says

    Thanks so much for sharing this tool. Is there any value to showing or adding a calculation for S&P 500 Total Return with Dividends but not reinvested? Philip

    • says

      You’re the first to ask – do you think you could share an example of what you mean? Figuring it out is easy if you mean “Price return + total of all dividends”, you should be able to just do addition on the Shiller numbers.

      • Philip says

        If an investor owned the S&P 500 for 10 years, for example, received dividends but did not reinvest them, it would seem that investor received a return somewhere between or at least different from the price only return and the total return of reinvesting those dividends along the way. I could add the dividends up, but I thought time value and CPI impact might be worth including – but I am probably just out of my depths here. In any case, the tool above is great and will suffice. Thanks.

        • says

          We’d have an issue though – if an investor first invested in the S&P 500 in, say, 1980, and didn’t pull it out until this month, they’d have a good amount of cash from the dividend payments. If we just added them up, we wouldn’t be accounting for the interest rate earned on that cash – whether it was the brokerage’s sweep, or moved to a savings account, or some other scenario.

          I think dividends in cash is a hard treatment for that reason… if only because it’s hard to figure out what happens to the dividends after the fact.

    • says

      Shiller’s dividend numbers don’t represent any day, but are an interpolation of quarterly data. Index prices he updates on a monthly basis, but he used to interpolate from yearly data. You should check out his site for details.

      Short answer? They are ‘average’ for the month, and not tied to any individual day.

      • Ted says

        I have the same question. For example, if I choose November 2007 as a beginning date, am I beginning with November 1, November 30 or something else? I stumbled across you calculator a few weeks ago and very much appreciate having it available. Just trying to better understand what I am seeing.

        • says

          Hi Ted, thanks for being a fan!

          It’s not a specific day, per se, but more of a determination of what an ‘average’ investor would return. Specifically, from Shiller, “Monthly dividend and earnings data are computed from the S&P
          four-quarter totals for the quarter since 1926, with linear interpolation to monthly
          figures.”

          So, if you pick November 2007 to November 2008 you’re looking at the return of an average investor who was in the market for a year from 2007 to 2008, but not ‘an investor who invested on November 1 and sold on November 30′ or similar.

          I’ve considered doing a total return calculator based on the S&P Total Return index, which allows you to directly compare 2 days. The issue? The TR data only goes back to 2009.

          • Ted says

            Maybe a better way to ask the question is to ask what it means to choose a particular month as the beginning month. Does the calculator include the data for the month chosen, or does it begin with the data for the following month? Or, does the calculation create a beginning point in some other fashion?

          • says

            If you’re asking my algorithm, basically:

            1) Grab the index price for the beginning month (from the Shiller data)
            2) Figure out how many new shares are bought based on taking his dividend data and dividing by 12 (it’s trailing data).
            3) In the next month, use the new number of shares owned to calculate the dividend
            4) Buy ‘new shares’ with the dividend
            5) Rinse, repeat, until the final month.

            I think the magic is in the Shiller calculations – note the S&P “500” didn’t exist before ’57, so before that he grafts older S&P indices onto the data.

          • Ted says

            Recently, I’ve been trying to measure the performance of our investments since November 1, 2007, the high point in our financial lives prior to the meltdown.

            Unfortunately, in my wife’s view anyway, I’ve been obsessed with tracking our investments for about 25 years now, calculating the value of our assets on an almost daily basis for many years now. Before mutual fund prices became easily available on the internet, I used to call the fund companies automated response numbers to get NAVs for our funds. I know; I’m a nut case, so take my questions for what they are — the wonderings of someone who really ought to get a life!

            From reading other comments and responses and Shiller’s explanation of his data, I understand that the tool is not precise and is based on averages and interpolations. Nonetheless, the tool is the best thing I have stumbled upon so far, and I’m trying to understand how it works.

          • Ted says

            Sorry, ran out of characters.

            Anyway, it sounds like when I plug in Nov. 2007 as the beginning point and Jan. 2013 as the end point, the result — in layman’s terms — is really from something like mid Nov. 2007 to something like mid Jan. 2013. Is that at least approximately correct?

            Thanks again for making this available.

          • says

            That’s one way to think about it, and probably best for what you described – from ‘Sometime in November’ 2007 until ‘Sometime in January’ 2013 (In early March we’ll have the February numbers). It’s impossible to get it to the day by day precision you were looking for, but it should get you in the right ballpark.

            My apologies to your wife, but take a look at the S&P 500 Total Return index. It should let you go day by day with your checks (same assumptions – no taxes or transaction fees), but I’m pretty sure it only goes back to 2009. You could use this tool to get benchmark returns up until when that index begins, then move to the day to day index for more recent market returns.

  12. Ted says

    A link and a question. I stumbled across this source of daily values for the S&P Total Return Index about a month ago: http://www.dailyfinance.com/quote/snpindex/sp-500-total-return-index/%5Esp5tri/historical-prices

    I have no idea how accurate it is. It does provide specific date values for the index for several years. I am only interested in the last six or so, but it appears to go back at least 10 years, if not much further.
    Any knowledge of where the data comes from or how accurate it is?

    • says

      Looks like the S&P 500 Total Return Index… I may have mentioned it (it’s published by S&P). They don’t have an API for me to pull, but since you are using it for personal reasons you can use those numbers (in a spreadsheet or something) then adjust for inflation by using my inflation calculator:

      http://dqydj.net/an-inflation-calculator-with-data-for-any-day-since-1913/

      As far as I know it should be accurate – I used SPTR numbers for my articles on the 2012 total return and for the ‘True Top’ S&P 500 article, heh.

  13. Kapil says

    What would be cool is to show the power of compounding. In other words, enter the following

    – Amount Invested
    – Period (Weekly, Bi-Weekly, Monthy or Quarterly)
    – Date of First deposit

    Click calculate should provide value of total nest egg. Link to details which shows each deposit with value of total nest egg compounded up to that date and final totals (Total Principal Invested, Capital Gains and if Dividends were re-invested then what would it be) .

  14. Me says

    Great tool! One minor issue: using October 1974 as a start date generates an error (dividing by zero most likely).

  15. Data-Guy says

    What would it take to include performance comparisons for the Dow Jones Industrial Average, Russell 2000, etc. They probably track the S&P 500 fairly closely but their different betas and dividends might tell interesting new tales.

  16. Ravi Apte says

    Great calculator. It will be great to see other indices as well (in addition to the S&P500). E.g RSP (Equi Weighted s&p500).
    Thanks

  17. says

    Do these numbers makes sense? When I calculate total return for the period Nov. 1994 through Oct. 2014, your calculator tells me that’s a gain of 523%, or a compounded 9.621%. But a compounded return of 9.621% over 20 years gets a 627% gain. Conversely, a gain of 523% would work out to a CAGR of 8.6%. Why the discrepancy?

    • PK says

      A slight difference in language – we’re computing ‘gain’, so we’re closer than at first glance:

      Start: $100
      End: $100 * (1.09621^20) = ~$627
      Gain: $527

      Or, when you get the factor of 6.27 or so, subtract 1.

      Thanks for the comment!

  18. Hjalti Atlason says

    Very need tool you have created!

    I got the Shiller data and calculated in excel, tried the maximum jan 1871 to october 2014, and got nominal 4.3% like the calculator!
    For the dividend reinvested case I got 5.8% instead of 9.0%. To get the number 9.0% the dividend would have to have average annual yield 8.8% but the price index rose only 4.3% on average.

    • PK says

      Please check that you have reinvested the dividends in your calculation. It seems to me that you may have counted the dividends, but didn’t reinvest them at the current price in your spreadsheet. For long periods of time like 143 years the dividend component will be dominant (even when yield is less than price increases), because eventually you will have more reinvested funds than ‘original’ funds.

      • Hjalti Atlason says

        I Have found error in my calculation, now I get the same as you 9.01% nom with dividends reinvested. Best to start buy some stocks!

  19. says

    If I wanted to see the return Jan. 1, 1929 to December 31, 1929

    My logic says Starting Month/Year is Jan, 1929 and Ending Month/Yr Dec, 1929

    But you say use Jan to Jan or Dec to Dec?? I don’t understand

    • PK says

      Unfortunately we don’t have daily data for this calculator, so the bet we can do is monthly averages as described in the article. If you wanted to do “1 year”, you would do Jan ’29 – Jan ’30 or Dec ’28 – Dec ’29, as it would cover 12 months of an ‘average’ investor’s experience.

      If you limit it to Jan-Dec, you’re only covering 11 months.

  20. Dave says

    This is an awesome tool – much appreciated for taking the time to build the page here and make it public. What would be an awesome addition to this is to factor in 2 more things. Just saying that the S&P has performed a certain way over a period of time is not enough to capture the the very REAL world effects of taxation and management fees. I realize that qualified plans may have taxes deferred, but I use this calculator to weigh different options in my regular accounts which are taxed every year.

    Is there any way to factor in an understandable year over year tax effect assuming that a certain percentage of the portfolio will be taxed due to mutual fund, index re-weighting etc? Further, there are always expense loads – they may be low, but they are there and still parasitic.

    I’m very tired of the sites out there with people touting Average Rates of returns, ignoring real factors like tax and expenses. As if everyone participating in the market should have HOPE as the key ingredient in their portfolio. That’s just crazy and it sets the wrong precedence causing people to over weight their equities accounts and not properly diversifying across other means such as physical commodities, their OWN jobs, etc. We need to see more financial literature pointing people in the direction of realistic returns and this calculator is an awesome step in that direction.

    • PK says

      Dave, thank you for the comment, but what you ask is a very involved project which can’t really be bolted onto the above. While you are right that tax treatments matter for folks investing outside tax advantaged accounts, different tax rates and commissions paid for shares makes a huge difference in returns. We’re already compromising with the Shiller numbers as they are ‘averaged’ over a month of ‘S&P’ (or synthesized) prices. Even with those caveats, we stand behind our numbers and disagree that hope is the only thing that makes equities beat commodities – even if typical investors would never match those returns. Even our commodity calculators don’t include tax rates and commissions, which can be high with collectible tax rates applying and sales prices over spot.

      That said, we’ve got something in the works which is closer to what you’re asking, but will come from a periodic reinvestment/DCA perspective. It’s also a large project, so won’t be around for a while, but please keep an eye out for it.

  21. Zunka Bhakari says

    PK

    What a eye opener. Thank you for making this information so easily available. Great Job!!!

    I accidentally stumbled on this while googling for S&P real return information.

  22. Sid Johnson says

    I’ve been doing some work with Professor Shiller’s data as well, and was trying to compute a total return as he does in his 2014 paper and as you are doing here. The total returns I found were way too high to be real, so I took a look at the dividends for SPY and VFINX, both of which are supposed to replicate the SP500. The dividends are much lower than what is reported by S&P, but they are quite similar to each other. Apparently, there is something squirrelly about the way S&P calculates dividends/share for the index. Some research on the web indicated that Jeremy Siegel has voiced concerns about how they calculate it, although I’m not sure that the problems are the same. In any case, if we can’t replicate the total return of the SP500, I’m not sure what the point is of all the research that uses SP500 total returns. What are your thoughts on this? Thanks!

    • PK says

      I’d say that even though what we present may not be 100% achievable due to hard to calculate dividends of S&P members, fees, taxes, slippage, or anything else, it’s still better than what was previously thrown about as ‘index returns’. But let’s take your example: Morningstar reports the growth of $10,000 in VFINX from 12/1/2004 to 12/1/2014 to be $21,324.80, and gives $21,566.71 as the S&P 500 total return number. Using Dec 2004 to Dec 2014, we give a very similar $20965.40 (I haven’t updated December yet, so if someone gets something different by a few dollars a few days from now don’t fret).

      The only way to get more exact than that would be to find someone who bought an index fund at your start date, reinvested through today, and never pulled money out – otherwise these estimates are as good as it gets and I would feel comfortable using them.

      • Sid Johnson says

        Sorry, I wasn’t implying a problem with your site, but what I thought was a lack of meaning in the index, given the way dividends are calculated. However, I think the problem was mine. Shiller’s data shows the quarterly dividends from S&P, and I was reading those to be four separate dividend amounts. Instead, they appear to be annualized in some way, so that each quarterly (or monthly if using Shiller’s interpolation) dividend is actually an estimate of the year’s dividend payout. Sound right? Thanks for your quick feedback; it convinced me to take yet another look.

        • PK says

          Oh I didn’t take it like that – I thought your concern was that the returns listed were ‘unattainable’, which is technically correct, because they assume certain things like no taxes, no fees, no transaction costs, etc.

          Yes – the dividend is off by 12x, so you’ll have to make an adjustment. The simplest to get you started would be to simply divide by 12 for the listed dividend, and treat that as correct for the month. Shiller has a brief note on data adjustments on this page: http://www.econ.yale.edu/~shiller/data.htm

          • Sid Johnson says

            Right, I can see the interpolation approach Shiller takes in his spreadsheet. However, you seem to have a more accurate read of the quarterly dividends. I’m doing some experimenting with the data, and would like to update what your spreadsheet has with the best data I can. Can you tell me if you arrived at your quarterly dps data by researching the underlying stock payouts or by disaggregating the trailing 12-month average in some way? If the latter, did you use a math approach directly on the moving average, or detect a pattern in the percentage of annual payout that occurs each quarter. Thank you for any insight you can give me.

          • Sid Johnson says

            Oh, I see now that I can use your three previous quarterly numbers and the 4th S&P reported TTM number to arrive at your number for the 4th quarter. Would still be interested in knowing if you used a different approach. Thanks

          • PK says

            Yes, that’s all you need to do – I’m not doing anything too interesting with the dividend numbers, just dividing to give monthly totals. Some not interesting DQYDJ history: the first generation of this tool was off-by-12 because I didn’t do any sort of dividend adjustment, hence the shoutout to our friend Ken Faulkenberry (who caught it first).

    • PK says

      I hesitate to answer as it changes every month – but as of 11:30 AM PST on 1/31/2015 the closing data for January 2015 is 1/7 (this will change during the next update), as you can see in the note at the top of the article. The other numbers are imputed from quarterly closing prices to approximate an ‘average’ investor, so they do not coincide with any specific dates.

      If you are further interested in the methodology, please see Professor Shiller’s site as linked.

      • says

        I would like to rephrase my original question, since I see now that the data is (quite understandably) not available immediately….

        Am I correct in assuming that when I put September 2014 as Starting Month/Year and November 2014 as Ending Month/Year I’m getting Sept. 1, 2014 –> Nov. 31, 2014?

        (I think that with the addition of a note indicating how the period is calculated this tool would meet the needs of the vast majority of users.)

        And I, too, would like to thank you for this very useful tool!

        Jerry

        • PK says

          No, that is not correct, there are no individual dates in this tool (other than the most recent month temporarily, which is revised when data becomes available. January 2015 mapping to 1/7 will certainly change when I update the data, and I will note the changed date in the first paragraph of this page.)

          Perhaps it isn’t clear, but I already have a note in the Methodology section which states “One thing to note is that the month’s ‘Price’ isn’t the price on a particular day, but an average of closing prices based on a year’s quarter’s data.” If you need more details, follow the link to Professor Shiller’s page.

          Thank you for your kind words, but I would disagree that the information isn’t clear and that a majority of users find this calculator not to meet their needs. As I have stated elsewhere in this comment section, if you have specific needs which differ it is best to take Shiller’s data directly into a spreadsheet tool such as OpenOffice or Excel in order to perform your custom adjustments on your own.

          • says

            I would like to rephrase my original question, since I see now that the data is (quite understandably) not available immediately….

            Am I correct in assuming that when I put September 2014 as Starting Month/Year and November 2014 as Ending Month/Year I’m getting Sept. 1, 2014 –> Nov. 31, 2014?

            (I think that with the addition of a note indicating how the period is calculated this tool would meet the needs of the vast majority of users.)

            And I, too, would like to thank you for this very useful tool!

            Jerry

  23. Gabriel says

    Thanks for this useful tool.

    Would be great if you could add an extra input to deduct tax on dividends. For example I pay a flat tax of 30% on US divs, but I believe US residents usually pay around 20% currently. If you could add another box to take this into account that would be perfect.

    Currently I’m approximating by averaging the “with div” and “without div” returns. Others out there would probably like to have a capital gains tax deductor too (not important for my purposes).

    BTW, my account growth since Jan 2005 of $100 = $246 after all taxes and expenses, which is an annualised 9.4%. Compare with S&P 500 w/ div (no tax) = $191 or 7.7 % p.a. And my true weighted return, given the timings of moneys into investment account, is 13.56% p.a. or $246 (growth of $100). And I’m usually 40% in cash. So don’t let Bogle tell you stock-picking doesn’t work.

    My strategy: main positions: solid companies with charts pointing in the right direction on relatively low p.e.’s. Look at monthly log charts for true picture. Speculate also but be ruthless on cutting losses and taking profits on speculative stocks (eg TWTR, small biotech, Chinese internet, YELP). Try to avoid bottom fishing except at bottom of major recessions. Where I lost money: emerging markets, oils (because I didn’t listen to my own advice). Main winners: Apple, biotech. Feed winners, starve losers.

    • Gabriel says

      Correction true weighted growth of $100 – haven’t calculated but should be be about $356. BTW would be good if you could add a box for “growth of $100″.

    • PK says

      I appreciate the comments, but adding additional boxes and inputs isn’t very easy nor will it keep the calculator generic for domestic and international investors and for various tax rates. We won’t be modifying this calculator (other than to add additional data), so if any of those enhancements or similar appear it will be in the form of a new calculator.

      If you would like to do a custom calculation, your best bet is to build it bottom up in something like Excel or OpenOffice. The data can all be found at the links to Professor Shiller’s site in the article attached to the calculator.

      • Sarah says

        Hello!

        This is a very interesting tool. I am trying to understand the proper way to calculate the return of a stock over one year including reinvested dividends. I am doing this on excel. Is there any way you could help?

        • PK says

          Briefly: pretend you buy shares at the market price using some dollar amount -it might be useful to use something like $1,000 for ease of (us humans, anyway) understanding it. Calculate the dividends received from the ‘number of shares’ you bought, and calculate how many ‘new shares’ that buys. Add that to the ‘running share total’.

          On the last month, you will have this ‘running share total’ – multiply it by the new market price to get the final value (say, $1,100). At that point, you can do the math here – total return, annualized return, etc, since you have a beginning and an ending price, as well as a time period.

          Hope this helped!

          • PK says

            I can’t answer that – it would be up to your specific requirements, tax situation, living situation, etc.

            Here in the United States, if you wanted to adjust for taxes and inflation you could inflation adjust and apply capital gains to the final result and in the intermediate steps apply a dividend rate on each month’s dividend purchase before adding it to your running total.

  24. Brian says

    Hello,

    I am doing some similar analysis and am finding that I cannot replicate your results for the reinvested calculations. Can you please provide a simple example calculation. Such as for the period from January 1871 to February 1871. Thanks!

    • PK says

      See this post for methodology: http://dqydj.net/sp-500-return-calculator/#comment-3577

      But one month is simple:

      Buy one share at 4.44
      (go to next month, index now 4.50)
      Have one share, dividends paid (0.26/12)* (1.00 shares), now you have 1.0048148148 shares in your portfolio

      Total value is 1.0048148148* 4.50, 4.5216666667, or a 1.83934% return.

      Now just repeat and your numbers should match the tool. Of course, you don’t have to follow that exact methodology – there are other equally valid ways to count the dividends.

    • PK says

      No – note our methodology; ‘months’ don’t match up to any specific day in the month, so by picking Jan – Dec you’re only getting “11 and change” months of data. Eyeballing the S&P chart, most of the movement is in January – so try Dec-75 to Dec-76 and you’re guaranteed to get all of the movement which happened in early 76.

  25. says

    I don’t understand why when I put in the start date of January 2014 and the end date of December 2014, the total return doesn’t match the total return from S&P’s website. Your numbers say 13.96% and the S&P website says 13.69%. Why the difference?

    • PK says

      There are some interesting discussions on this issue in the comments and the methodology, but it boils down to the Shiller data – in short, none of the months mean any specific days. It’s more of an “average investor” starting and ending in those months.

      When you do Jan – December you’re getting approximately 11 months, so the data is annualized based on those 11 months. For individual, specific days – and I’m assuming you want Jan 1 to Dec 31 – you’d want to go to S&P. To get an approximation here, you can do Jan-Jan or Dec-Dec, as that would cover approximately 12 months.

  26. Maggie says

    Hi, I love the information this provides and cannot find anything better on line. However, I have a question for you: I am trying to find out what the current value would be of a certain amount of money if I had invested it in 1988 into an S&P 500 index fund. Just so I know if I am interpreting the meaning of this tool correctly, please let me know if it is true that if I enter some month (specific month is not important to me) in 1988 to the current month and year and get an overall return (dividends reinvested) of 1356%, that means I could multiply my original investment amount by 13.56 and get the value it would be in this current month? I understand fees and taxes would not be subtracted. What if you added a box for amount of original investment, and a box for amount of current value (without taxes and fees deducted)? Or, maybe I am misinterpreting the purpose of this calculator? Thank you for putting this on line! I thought this information would be easy to find, but even sites like vanguard do not have a calculator like this one.

    • PK says

      Yes, the calculator is based on a lump sum investment – it roughly approximates how the index would perform if dividend payouts were not ignored, but were instead reinvested to buy more shares (that’s why there is no ‘starting investment’ box). We do have something in the works which may be what you’re looking for – a calculator which allows more than one investment in the index.

      To do the math, remember that the number quoted is the gain, not the total amount. So, if you started with $100:

      50% gain: $50, add it to the original $100 and you have $150.
      200% gain: $200, add it to the original $100 and you have $300.

  27. Max says

    I love your calculator. Thank you so much for providing this awesome tool. I have downloaded Shiller’s data spreadsheet ie_data.xls. I have adjusted the data for dividend reinvestment per your earlier replies (thanks also for this information) and have graphs of price and dividend reinvested value. I would also like to plot Inflation (CPI) adjusted data. How do I add these values to the spreadsheet? Thanks.

    • PK says

      The simplest would probably be to adjust each month’s index total by simply using CPI. Use the ratio of the final CPI over the current CPI – so index values in the past will be ‘higher’ than nominal while inflation is increasing.

      The calculator itself only needs to do the math once, for the start and end point – but you would be better served by adjusting each month.

      • Max says

        Thanks for the help. I did the calculations exactly like you said, and then realized my calculations matched Column H, Real Price. I just did not know what Column H Real Price was. I’ve made an Excel Chart of CPI Adjusted, Dividend Reinvented S&P Comp (from ie_data.xls) that matches very well to a 6.8% Trend Line plotted on a Log scale. I also have a similar Trend Chart but not CPI adjusted vs. a 9.0% Trend Line. Adjusting for CPI really makes the data fit nicely. Thanks again for your help and your great calculator. I used the calculator to help debug and as a sanity check on my calculations. And thanks to Shiller for providing the data. PK: I would be happy to share my Excel Chart with you if you would provide me with an email address or drop box so I can get it to you.

        In my case I can ignore investment costs; I have my money in a very low cost mutual fund. I can also ignore taxes for now; it is all in retirement accounts. Based on the long term 9% Dividend Reinvested Return, or 6.8% return adjusting for inflation, I am “all in.”

        • PK says

          I’ve got something in the works which might help you run an analysis like this – subscribe and check in around the end of the month. It’s been in the works for a while, but it would help you factor in things like expenses (even small ones).

  28. says

    Kudos on the calculator. Is there a way for you to provide an add on to show month by month performance if desired?

    Selling IUL and FIA products, this would be a great feature for me to present to clients that utilize annual/monthly point to point indexing and their historical ROR. Expressed in a percentage -/+ format in Excel or even screen display.

    In any event, great tool!!!!!

    • PK says

      Not so simply, but we’ve got some calculators in the works which may be more along the lines of what you might like. Be sure to subscribe – we’ve got something interesting coming at the end of the month.

  29. Gary says

    Thanks for creating this tool. It’s already proving helpful to me, but I wanted to ask a question. I’ve invested lump sums of money on behalf of my kids over the years, always allowing the dividends to be reinvested in the market. Now that they’re grown, I want to ‘cash them out’ so that the kids realize the full benefit of the growth. So is it appropriate in this circumstance to adjust for inflation or not? It seems to me that the accumulated benefit should ignore inflation.

Trackbacks

  1. […] En eso tiene razón. Hay que descontar de inversión y hay que tener en cuenta varias fechas de inversión para evitar que por un año malo, una cohorte de pensionistas pierda sus ahorros. Por ello, emplearé calculadoras de retornos del SP500 que descuentan inflación, y consideraré un periodo de inversión de 30 años. En general se obtienen (reinvirtiendo dividendos y descontando inflación)en todos los periodos de 30 años retornos superiores al 5.3% anual. La media histórica efectivamente ronda el 7% y desde 1971, del  6.984%. Esto no es del todo realista: un pensionista invertirá año a año, esté la bolsa alta o baja y habría que tener eso en cuenta. Fuente: http://dqydj.net/sp-500-return-calculator/ […]

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  3. […] If you are in the camp that says this last five years has been an anomaly, history may beg to differ. Over the last 50 years we have experienced wars, assassinations, currency crises, banking crises, terrorist attacks, recessions, SARs, mad cow disease, military engagements, tax hikes, Fed rate hikes, and yes, even political gridlock. As the chart below shows, the stock market is volatile over the short-run, but quite resilient and lucrative over the long-run (+6,863% over 49 years). In fact, from January 1960 to October 2013 the S&P 500 index has catapulted +14,658%, including reinvested dividends (Source: DQYDJ.net). […]

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