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Strategies & Market Trends : Value Investing

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To: E_K_S who wrote (44713)9/30/2011 11:30:42 PM
From: Difco  Read Replies (2) of 78667
 
E_K_S,

I read a Credit Suisse Global Investment Returns research paper, which showed that a $1 invested in US Equities in 1900 grew to $600 by the year 2000 when dividends were reinvested. When the investor relied solely on the capital gains, the $1 grew to approximately $10. I was shocked by the difference! For comparison, if you had invested in bonds you would have had approximately $6.

Personally, I have been underestimating the compounding power of dividends.
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