Unexpectedly Intriguing!
18 January 2007

We have just updated our signature investing-related tool The S&P 500 at Your Fingertips! The tool now spans from January 1871 through December 2006 and incorporates all the available dividend, earnings and inflation data available for this time span.

Just playing with the numbers this morning, we find that the year-over-year gain in the S&P 500 from December 2005 to December 2006 provided for a nominal (non-inflation adjusted) returns of 12.23% without dividend reinvestment and 14.27% with the reinvestment of dividends.

If you factor the 2.54% gain in reported inflation over that time period, the real rates of return for the S&P 500 are 9.69% without reinvesting dividends and 11.73% with reinvested dividends.

All in all, 2006 was a very good year for index investors!

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About Political Calculations

Welcome to the blogosphere's toolchest! Here, unlike other blogs dedicated to analyzing current events, we create easy-to-use, simple tools to do the math related to them so you can get in on the action too! If you would like to learn more about these tools, or if you would like to contribute ideas to develop for this blog, please e-mail us at:

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