The Dow Jones Industrial Average returned 6.87% in 2020. Using a better calculation, which includes dividend reinvestment, the Dow Jones returned 9.70%.
I ran the above calculation for an index purchase at open on January 2nd, 2020 and sold at close on December 31, 2020. This would match the year-to-date return if you looked on the last of the year.
Alternatively, you might like a one-year holding proxy. If you bought the closing price on December 31, 2019 and sold the close on December 31, 2020 the returns would be 7.25% – 9.72% with dividends reinvested.
| Price From | Price | Dec 31 Close | Gain/Loss |
| Jan 2 Open | 28638.97 | 30606.48 | 6.87% |
| Dec 31 Close | 28538.44 | 30606.48 | 7.25% |
| Price From | Price | Dec 31 Close | Gain/Loss |
| Jan 2 Open | 64517.44 | 70778.10 | 9.70% |
| Dec 31 Close | 64505.48 | 70778.10 | 9.72% |
The takeaway message? The exact date doesn't really matter. However, dividends matter.
You can see the effects of reinvesting over a single year – ~ 2.83%. And even if you didn't reinvest, you'd still have to do something with your dividends (or use the checks to start a fire to heat your house, I guess!).
Most stock indices nowadays are market capitalization weighted, (e.g., the 2020 S&P 500 Return). The Dow Jones Industrial Average is a price-weighted index, by contrast.
Price-weighted indices derive their actual trading prices by the trading price of the underlying company shares times some individual stock factor.
Price weighting is not a great indexing method. However, I'm not here to doubt its usefulness – in 1896, it was easier to track price changes than up-to-the-minute market capitalization. Also, it has historically tracked other indices pretty well... so Dow Jones got a ton right.
Data is sourced from the Dow Jones Indices, owned by S&P Dow Jones Indices. There you'll find both the price index and total return index.
Want even more? DQYDJ has you covered – both investing content, and some Dow Jones specific posts:
See DJIA returns in other years:
How do you see the Dow Jones Industrial Average performing in 2021?
The NASDAQ returned 42.58% in 2020. Using a better calculation, which includes dividend reinvestment, the NASDAQ returned 42.99%.
The above numbers assume you bought the NASDAQ index at the open on January 2nd, 2020 and sold at close on December 31, 2020. This is the same as "Year to Date" or YTD return if you check the last day of the year.
Prefer trying a "full year" of history? If you bought the closing price on December 31, 2019 and sold the closing price on December 31, 2020 the returns were 43.64% and 44.92%, respectively.
| Price From | Price | Dec 31 Close | Gain/Loss |
| Jan 2 Open | 9039.46 | 12888.28 | 42.58% |
| Dec 31 Close | 8972.60 | 12888.28 | 43.64% |
| Price From | Price | Dec 31 | Gain/Loss |
| Jan 2 | 10680.92 | 15272.97 | 42.99% |
| Dec 31 | 10,539.04 | 15272.97 | 44.92% |
Really, timing doesn't matter that much – but even in the historically tech-heavy NASDAQ, dividends matter. Even if you didn't reinvest your dividends, they're a real factor in returns.
Not that you had a rough time even if you lost your dividend checks though. The pandemic seemed to pull forward many company's digital plans. My company ran a survey: the typical firm moved their digital transformation plans up 6 years due to COVID-19.
Transformations or not, and even when this virus is in the past: Dividends matter.
The NASDAQ Index is owned by NASDAQ Indexes. They provide both the index level and total return data. Find NASDAQ total return data here or on investing.com.
See NASDAQ returns in other years:
Any NASDAQ predictions for 2021?
The 2019 NASDAQ return was 37.89% calculated from opening and closing prices. Using a superior calculation factoring in dividend reinvestment, the NASDAQ returned 39.39% in 2019.
The above numbers assume you bought the NASDAQ index at the open on January 2nd, 2019 and sold at the close on December 31, 2019. This is the equivalent to the "Year to Date" or YTD return if you check after the last close of the year.
Prefer trying to get a full year of history? If you change the buy date to the closing price on December 31, 2018 the returns were 35.23% and 36.69%, respectively.
| Price From | Price | Dec 31 Close | Gain/Loss |
| Jan 2 Open | 6506.91 | 8972.60 | 37.89% |
| Dec 31 Close | 6635.28 | 8972.60 | 35.23% |
| Price From | Price | Dec 31 Close | Gain/Loss |
| Jan 2 Open | 7,560.76 | 10,539.04 | 39.39% |
| Dec 31 Close | 7,709.91 | 10,539.04 | 36.69% |
As we mentioned in the 2019 return posts for the Dow Jones Industrial Average and S&P 500, the timing you choose – last day of last year or beginning of this one – doesn't matter much. Just stay consistent.
However, even with a traditionally technology heavy index like the NASDAQ, dividends matter. Sure, technology doesn't pay as many dividends as other industries... but it does pay them. Over a longer timeframe, they still make up a massive chunk of returns,
In summary: Dividends matter. Even with the NASDAQ.
The NASDAQ Index is owned by NASDAQ Indexes. They also provide both the index level and total return (read:dividend reinvested) data. You can find NASDAQ total return data here or on investing.com.
See NASDAQ returns in other years:
Any NASDAQ predictions for 2020?
The Dow Jones Industrial Average returned 23.76% in 2019. Using a calculation including dividend reinvestment, the Dow Jones returned 25.34% in 2019.
The numbers above match an index price purchase on open on January 2nd, 2019 and sold at close on December 31, 2019. This is the same as the "year to date" (YTD) return if measured after close on the last trading day of the year.
Alternatively, you can look for a one-year holding proxy. If you bought the closing price on December 31, 2018 the returns would be 22.34% and 25.34%, respectively* (see the note below).
| Price From | Price | Dec 31 Close | Gain/Loss |
| Jan 2 Open | 23058.61 | 28538.44 | 23.76% |
| Dec 31 Close | 23327.46 | 28538.44 | 22.34% |
| Price From | Price | Dec 31 Close | Gain/Loss |
| Jan 2 Open | 51,462.77* | 64505.48 | 25.34% |
| Dec 31 Close | 51,462.77* | 64505.48 | 25.34% |
*The Dow Jones Total Return Index reports the same closing price as the next day open.
The important message? Pick whichever date for an annual return: it doesn't really matter.
Dividends matter. You can see the effects even over a single year; ignoring the compounding effects over a longer period, such as a career, will show entirely wrong (and overly pessimistic) results.
Most stock indices nowadays are weighted by company market capitalization, (see for example the 2019 S&P 500 Return). However, the Dow Jones Industrial Average is a price-weighted index.
Price-weighted indices derive their actual trading prices by the trading price of the underlying company shares times an individual stock factor.
Price weighting is not a great indexing method. I'm not knocking it; it was perfect for its time. Price-weighting plus limiting the DJIA to only 30 stocks were reasonable steps to take when the Dow Jones Industrial Average began – in 1896.
Other sites take an even more pessimistic view... I won't. The DJIA actually tracks most large cap indices well.
Data is sourced from the Dow Jones Indices, owned by S&P Dow Jones Indices.
Need more Dow Jones? We have some tools which help your research on the history of the index.
See DJIA returns in other years:
How do you see the Dow Jones Industrial Average performing in 2020?
The S&P 500 Price index returned 30.43% in 2019. Using a better calculation including dividend reinvestment, the S&P 500 returned 33.07%.
The quoted numbers are returns all in one year (2019) – you bought the absolute open on January 2nd, 2019 and sold the closing trade on December 31, 2019. This is equivalent to the "year to date" return after the close on the last trading day of the year.
If you'd prefer a proxy for a one year span, the numbers buying at the December 31, 2018 closing price the returns would be 28.88% and 31.49%, respectively.
| Price From | Price | Dec 31 Close | Gain/Loss |
| Jan 2 Open | 2476.96 | 3230.78 | 30.43% |
| Dec 31 Close | 2506.85 | 3230.78 | 28.88% |
| Price From | Price | Dec 31 Close | Gain/Loss |
| Jan 2 Open | 4924.81 | 6553.57 | 33.07% |
| Dec 31 Close | 4984.22 | 6553.57 | 31.49% |
As always, the exact timeframe that you choose to compute the total return on an index doesn't matter too much (but stay consistent). However, computing dividends does matter.
Sure – the S&P 500's return was excellent either way. However, you need to account for the dividends you receive. If you reinvested dividends (as the total return number implies), all the better - that's compounding on compounding!
I've been banging the dividend drum for a while, and I won't stop today:
Discount price returns. Do the dividend math – or, hey, keep visiting DQYDJ!
The S&P 500 Price and Total Return index is owned by S&P Dow Jones Indices owns and maintains the S&P 500 Index. Since 1987 they maintain both indices, and you can find the S&P (now) 500 in various stages much further back.
DQYDJ has quite a collection of calculators and tools for you to use total returns for research or other purposes.
You can find both the S&P 500 and the Total Return at Yahoo!. Here's the overlay for 2019:
Just reinvesting dividends would have boosted your returns over 2.5 percentage points. If you only looked at price returns you'd inappropriately be looking at lower returns – which don't tell the whole story.
Either way – it was a great year! And much better than last year's losses (with and without the dividend calculation) Just keep those comparisons appropriate.
Here's to more massive gains in 2020 📈.
Other years:
What do you see the S&P 500 doing in 2020?
The 2018 NASDAQ return was -4.36% calculated from opening and closing prices. Using a superior calculation factoring in dividend reinvestment, the NASDAQ returned -3.33% in 2018.
The above numbers assume you bought the NASDAQ index at the open on January 2nd, 2018 and sold at the close on December 31, 2018. The numbers for buying at the December 29, 2017 closing price are -3.88% and -2.84%, respectively.
Here are the numbers for the 2018 NASDAQ price returns:
| Price From | Price | Dec 31 Close | Gain/Loss |
| Jan 2 Open | 6937.65 | 6635.28 | -4.36% |
| Dec 29 Close | 6903.39 | 6635.28 | -3.88% |
Reinvesting dividends on the NASDAQ in 2018 led to returns of:
| Dividend Reinvested From | Price | Dec 31 Close | Gain/Loss |
| Jan 2 Open | 7975.23 | 7709.91 | -3.33% |
| Dec 29 Close | 7935.29 | 7709.91 | -2.84% |
The NASDAQ has traditionally been a technology-heavy index. Technology companies tend towards a growth bias and often pay out fewer dividends than other economic sectors. As a result, of the most followed US indices, the NASDAQ throws off the fewest dividends.
That caveat aside, NASDAQ firms do pay dividends. They're not insignificant - 1.04% is an additional 51.2% over a average 40 year career. (That's also a reminder to minimize the fees you pay. Even small fees add up).
Dividends matter. Even on the NASDAQ.
This data comes from NASDAQ Indexes. They also maintain many specialized indexes - biotechnology, big companies, and others.
We can't match resources with the lists in the 2018 S&P 500 Return and 2018 Dow Jones Return posts for the NASDAQ.
We have one unique post on offer though. In 2014 we estimated how buying the peak of the Tech bubble in 1999-2000 would have returned:
Marketwatch can get you both the NASDAQ price and total return indices for easy graphing (and historical comparisons) . Here's how it trended in 2018:
Regardless of your choice of starting date, it was a tough year on the NASDAQ. Some individual stocks - including major names such as the FANGs of Facebook, Amazon, Netflix, and Google - were down well more than typical.
Also, remember: your mileage may vary. Slippage, dividend timing, fees, purchase timing, and other factors affect an investor's final numbers.
See NASDAQ returns in other years:
What do you see the NASDAQ doing in 2019? Want to predict a return?
The Dow Jones Industrial Average returned -5.97% in 2018. Using a calculation including dividend reinvestment, the Dow Jones returned -3.48% in 2018.
The numbers above match an index purchase on open on January 2nd, 2018 and sold at close on December 31, 2018. Alternatively, if you bought the closing price on December 29, 2017 the returns would be -5.63% and -3.48%, respectively.
(We source our numbers from Marketwatch. Note the DJIA total return index uses the same price for December 29 close and January 2 open.)
Here are the return numbers in tabular form for the Dow Jones Industrial Average index price:
| Price From | Price | Dec 31 Close | Gain/Loss |
| Jan 2 Open | 24809.35 | 23327.46 | -5.97% |
| Dec 29 Close | 24719.22 | 23327.46 | -5.63% |
And for the (superior) dividend-reinvested total return index:
| Dividend Reinvested From | Price | Dec 31 Close | Gain/Loss |
| Jan 2 Open | 53317.96 | 51462.77 | -3.48% |
| Dec 29 Close | 53317.96 | 51462.77 | -3.48% |
Pick either date; your choice of calendar square doesn't affect the core message: dividends matter. Even in a down year in a rough environment for investors.
Most other popular stock indices are weighted by company market capitalization, (e.g., see the 2018 S&P 500 Return). However, the Dow Jones Industrial Average is a price-weighted index.
Price-weighted indices derive their actual trading prices by the trading price of the underlying company shares which are each multiplied by some factor. Price weighting is not a great indexing method. (It was a huge invention for its time though.)
Setting aside construction, the Dow Jones is still extremely popular. Consisting of 30 of the top companies and covering most industries in America, changes in the Dow Jones drives clicks, views, and financial news. Its 30 companies are among the largest in America - consequently the DJIA pays out more dividends than most other widely tracked indices.
DIA is the most popular Dow Jones ETF if you are interested in investing. There are quality mutual funds as well.
Data is sourced from the Dow Jones Industrial Average Total Return Index, maintained and owned by S&P Dow Jones Indices.
Need more Dow Jones? We have some tools which help your research on the history of the index.
Here's the Dow Jones Industrial Average return chart for 2018 for price performance and with dividends reinvested.
2018 was a rough year for the Dow Jones Industrial Average.
Of course, even down your mileage may vary. Taxes, slippage, timing, fees, availability and other factors would change the exact return number you see even if you bought on one of the selected dates.
However, if you reinvested your DJIA dividends you did better than using your checks for kindling.
See DJIA returns in other years:
How do you see the Dow Jones Industrial Average performing in 2019?
The S&P 500 Price index returned -6.59% in 2018. Using a better calculation which includes dividend reinvestment, the S&P 500 returned -4.75%.
The quoted numbers require that you bought the opening trade on January 2nd, 2018 and sold the closing trade on December 31, 2018. If you'd prefer the numbers buying at the December 29, 2017 closing price the returns would be -6.24% and -4.38%, respectively.
For the index price returns, here's the breakdown:
| Price From | Price | Dec 31 Close | Gain/Loss |
| Jan 2 Open | 2683.73 | 2506.85 | -6.59% |
| Dec 29 Close | 2673.61 | 2506.85 | -6.24% |
For the index dividend-reinvested returns, here are the details:
| Dividend Reinvested From | Price | Dec 31 Close | Gain/Loss |
| Jan 2 Open | 5232.72 | 4984.22 | -4.75% |
| Dec 29 Close | 5212.76 | 4984.22 | -4.38% |
Whichever set of return time-spans you prefer (and it doesn't really matter), the message this year remains the same: dividends matter. Neither return quote looks particularly healthy, but it's important not to discard dividends to better match the performance of actual investors.
Simply quoting price returns without regard to real returns due to the effects of reinvesting funds doesn't reveal the true return on an investment. Don't accept price returns at face value.
S&P Dow Jones Indices owns and maintains the S&P 500 Index. They have both the classic S&P 500 price index as well as the dividend reinvested numbers (from 1987 forward).
Want more than this post can give you? While we don't (yet?) have a daily return calculator, we have some monthly resolution calculators for the S&P 500:
You can find both the S&P 500 and the Total Return at Marketwatch. Here's the overlay for 2018:
Factoring in dividends and reinvestment moved the return from a mid 6%s loss to under 5%. While no investor perfectly timed openings and closing (and all faced fees and taxes!) it's important to attempt to factor in the effects of dividends.
In fact, in 2018 and 2019 many brokerage accounts allow you to automatically set up dividend reinvestment on your stocks and funds. Some will even do it for free and account for fractional shares.
Make sure you know where your dividends end up! Good luck in 2019.
Other years:
What do you see the S&P 500 doing in 2019?
The S&P 500 and the broader equity markets continue to outperform and have seen annual inflation-adjusted 15.8% returns from March 2009 through the end of December 2017. More recently, from November 2016 to January 2017, the S&P 500 has returned 22.3% in total.
I started with each year's inflation adjusted S&P 500 return, inflation-adjusted from data by Robert Shiller dating back to 1871. DQYDJ has a S&P 500 return calculator here.
The returns are vastly different, even if returns will average out to 6%-10% per year. This variance is why sequence risk is a major threat to early retirement, where a few very negative years hit a retiree in early retirement years even if they would be safe from later declines.
Another consequence of this is that very rarely will the stock market return "around" any number. Thus, when a market predictor says "the market will return 3% next year", it is very unlikely that it will return exactly 3%. The "prediction" (if it is worth anything) is best thought of as "the least wrong" estimate.
Monthly data would show an even wider variance, even if the absolute numbers of the returns are lower (sadly no month ever returned 40%).
As of this writing, the S&P 500 has returned 2.72% in 2018, putting it right at the 36th percentile for annual returns. Most years it's beating are negative years (as can be seen on the chart). Given we are only 8 trading days into the year out of ~252, we are on pace for a 132.9% return this year. (You can count on that!)
Some fun S&P 500 return facts:
Returns are notoriously difficult to project. People have been calling market ceilings forever, starting heavily during 2011 in the current market cycle.
The problem with many of these predictions are the timing and the confidence of the claim. Certainly, a case can be made for stocks being overpriced but it is important to mind the difficulty in predicting the exact timing of a potential turn and the magnitude of the turn.
When projecting future returns for your portfolio, it is most appropriate to use a wide distribution of returns. You may have a strong belief about a mean return estimate (say, 7% a year over a series of years), but it is helpful to show how sensitive portfolios are to either different mean estimates (say, if the return drops to 4% on average) or to a series of very bad years.
This can be modeled using some of the traditional returns. For example, look at the chart up above, where 25% of annual returns were above 21.3% and another 25% were above 8.2%.
In short, doubt the certainty of any prediction within a tight timeframe. You can play around with annual returns in any 12 month rolling period with our S&P 500 Historical Return Calculator.
Cheers,
Cameron Daniels
The 2017 NASDAQ return was +27.24% calculated from the price index. Using a better calculation which factors in dividend reinvestment, the NASDAQ returned +28.62% in 2017.
The above numbers assume you bought the NASDAQ index on January 3rd, 2017 and sold at close on December 29, 2017. The numbers for buying at the December 30, 2016 closing price are +28.24% and +29.64%, respectively.
Here are the price returns on the index:
| Price Return | Open | Close | Gain |
| Jan 3, 2017 Start | 5425.62 | 6903.39 | 27.24% |
| Dec 30, 2016 End | 5383.12 | 6903.39 | 28.24% |
Here are the NASDAQ dividend reinvested returns:
| Dividend Reinvested Return | Open | Close | Gain |
| Jan 3, 2017 Start | 6169.49 | 7935.29 | 28.62% |
| Dec 30, 2016 End | 6121.12 | 7935.29 | 29.64% |
Traditionally, the NASDAQ has been a technology-heavy index. Further, technology companies have a growth bias and tend to pay out fewer dividends than other economic sectors.
That important caveat aside, NASDAQ firms do pay dividends - depending on your choice of start date, reinvesting would have added around 1.4% to your annual return in 2017. That's not nothing - 1.4% is an additional 74.4% over an average 40 year career. (As an aside, it's also a reminder to minimize the fees you pay).
Once again: dividends matter. Even with a tech-heavy index.
These numbers come from NASDAQ Indexes. They also have a number of specialized indexes - biotechnology, big companies, and the like.
We can't match the number of additional resources we listed in the 2017 S&P 500 Return and 2017 Dow Jones Return posts for the NASDAQ. However, in 2014 we estimated how buying the peak of the Tech bubble in 1999-2000 would have turned out:
We also compared the technology bubble to the (since-deflated) Shanghai Composite Bubble:
2017 NASDAQ Return and Dividend Reinvested Return