The Dow Jones Industrial Average returned +24.39% in 2017. Using a calculation which includes dividend reinvestment, the Dow Jones returned +28.11%.
Those numbers from the introduction are accurate for an index purchase on January 3rd, 2017 sold at close on December 29, 2017. Alternatively, if you bought the closing price on December 30, 2016 the returns would be +25.08% and +28.11%, respectively.
Here are the price returns in table form, including both price and dividend reinvested numbers:
| Price Return | Open | Close | Gain |
| Jan 3, 2017 Start | 19872.86 | 24719.22 | 24.39% |
| Dec 30, 2016 End | 19762.6 | 24719.22 | 25.08% |
And here are the dividend reinvested returns again for both:
| Dividend Reinvested Return | Open | Close | Gain |
| Jan 3, 2017 Start | 41619.65 | 53317.96 | 28.11% |
| Dec 30, 2016 End | 41619.65 | 53317.96 | 28.11% |
(We source our numbers from Marketwatch - as we went to press the dividend reinvested numbers matched for both dates.)
Whichever date you choose, we can't improve our favorite message: dividends matter. Although 25% or 28% are both huge returns, the 28% number is the most accurate to quote. You simply can't ignore the effect of dividends on stock market returns and it's surprising how commonly this simple math is neglected.
As compared to other popular indices which are weighted by company market capitalization, (e.g., see the 2017 S&P 500 Return) 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 isn't a good method of creating indices even though it was an excellent invention for its time.
Setting aside matters of construction, the Dow Jones is still an extremely popular index. Consisting of 30 of the top companies in America and representing most industries, Dow Jones volatility can drive financial news like no other index. Those 30 companies are among the largest in America - consequently the DJIA pays out more dividends than most other indices.
It's possible to invest in an ETF that tracks the Dow Jones Industrial Average. DIA is the most popular Dow Jones ETF. There are a few quality mutual funds as well.
Data is from the Dow Jones Industrial Average Total Return Index, from S&P Dow Jones Indices. The chart hails from Marketwatch.
Want more on the Dow Jones Industrial Average? We have a couple tools which can help you research the history of the index.
Here's the Dow Jones Industrial Average return chart for 2017 for price performance and with dividends reinvested.
2017 was an epic year for the Dow Jones Industrial Average. It was in the top 22% of the set of all rolling 12-month returns on the Dow.
As we always say, though, your mileage may vary. Varied effects from taxes, slippage, timing, fees, availability and other factors would change the exact number you see. However, if you reinvested your DJIA dividends - or even if you threw them away - you had a great year.
See DJIA returns in other years:
How do you see the Dow Jones Industrial Average performing in 2018?
The S&P 500 Price index returned +18.74% in 2017. Using a better calculation which includes dividend reinvestment, the S&P 500 returned +21.14%.
The above quoted numbers are accurate if you bought the index at the opening price on January 3rd, 2017 and sold at the closing price on December 29, 2017. If you'd prefer the numbers buying at the December 30, 2016 closing price the return would be +19.42% and +21.83%, respectively.
Here are the index price returns:
| Price Return From | Open | Close | Gain |
| Jan 3, 2017 Start | 2251.57 | 2673.61 | 18.74% |
| Dec 30, 2016 End | 2238.83 | 2673.61 | 19.42% |
Following are the dividend reinvested returns:
| Dividend Reinvested Return From | Open | Close | Gain |
| Jan 3, 2017 Start | 4303.12 | 5212.76 | 21.14% |
| Dec 30, 2016 End | 4278.66 | 5212.76 | 21.83% |
Whichever set of return time-spans you prefer, the message is the same as last year's: dividends matter. If you invest in funds or stocks that pay a dividend you'll have to choose what to do with the payouts. Simply quoting price returns without regard to real returns in cash form doesn't reveal the true impact of an investment.
These numbers come from S&P Dow Jones Indices, the owner of 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.
Reading this and want more? We haven't built a daily resolution calculator, but we have built a few monthly resolution calculators for the S&P 500:
Marketwatch Comparison of Total Return vs. S&P 500 Price Index in 2017
Adding dividend reinvestment to the math moved the needle from under 20% to over the psychological barrier. (Due to round number bias, it's a significant difference to us humans). It's also the right way to look at the returns.
Unless you burned the dividends you received in 2017, you had to make some decision on what to do with that cash. Nowadays, many investing accounts allow you to automatically reinvest these dividends, giving you returns that closely approximated the numbers quoted here.
Of course, your mileage may vary. Taxes, slippage, timing, fees, availability and other factors would have changed your exact results... but the point remains. Dividend returns are real returns and it was an excellent year for the stock market.
Other S&P 500 annual returns:
What do you see the S&P 500 doing in 2018?
With dividends included and reinvested, the 2016 NASDAQ Return was 11.28%. The number you'll probably see quoted more often is 9.91%, which was the NASDAQ index price return. Those returns were realized between the 1/4/2016 market open and the 12/30/2016 close.
Just like with the 2016 S&P 500 Return numbers, including dividends was the difference between 'single digit' returns and returns over 10%. (Even in the NASDAQ, which historically has paid fewer dividends.)
Note: Choosing the NASDAQ close in 2015 makes more than a rounding error of difference. See note later in article!
We've made it a habit to publish these articles annually because dividends are so important to the actual returns of investors. (That's true even for the NASDAQ.)
Companies listed on NASDAQ pay fewer dividends than companies on the Dow Jones, but even here dividends make a material difference. (See our 2016 Dow Jones Industrial Average return calculation).
Yes, it is true that some investors do not reinvest their dividends in the index. Even so, only using price returns is effectively ignoring dividends altogether. Dividends immediately spent still count as real returns.
While we do have calculators for many indices, we don't (yet?) have a NASDAQ return calculator. For shorter time periods, you should use NASDAQ's own total return index (the source of this article).
Marketwatch can show you the NASDAQ Total Return index at historical points. Side by side, here is how the 2016 NASDAQ return compared with the reinvested dividend return:
2016 NASDAQ Return, Price Index vs. Deividends Reinvested
And, as per tradition, the same data in chart form:
| 01/04/2016 Open* | 12/30/2016 Close | Annual Return | |
| NASDAQ Total Return | 5500.56 | 6121.12 | 11.28% |
| NASDAQ Index | 4897.65 | 5383.12 | 9.91% |
* Choosing the 12/31/2015 Close instead would give 8.87% and 7.50% returns, respectively. Either way, dividends mattered! But then, so too do the dates and times you pick.
Over long enough investing time-frames, dividends will dominate price returns as dividend-purchased shares compound. You need to make an effort to account for them when benchmarking your own returns (even if you don't want to consider immediately reinvesting, that money was earned.)
See other NASDAQ annual returns:
Any predictions for the NASDAQ in 2017? Do you know why most financial news articles don't quote dividend adjusted returns?
The Dow Jones Industrial Average did not return 13.54% in 2016, although that is probably a number that you'll see quoted. Adjusted for dividend reinvestment, the 2016 Dow Jones Industrial Average Return was actually 16.47%. That's a full 2.93% points higher due to reinvested dividends.
As we wrote in our last article on the 2016 S&P 500 Return, only using the index price return is unrealistic. When limiting the scope in that way, it's as if dividend payments aren't received or destroyed. Even if an investor chooses not to reinvest dividends, price returns can be very far from the real gain.
And dividend reinvestment is easier nowadays than ever before - many brokerages even have a cheap or free reinvestment option. All the more reason to not ignore dividends...
We have a Dow Jones reinvestment calculator on the site which has a monthly resolution. It will do the math for you on how an investment would have performed with dividends reinvested.
We get our data from the Dow Jones Industrial Average Total Return Index, from S&P Dow Jones Indices. Marketwatch brings you the chart today. Here's how a dividend reinvested Dow looked next to the Dow Jones Industrial Average price index last year:
2016 Dow Jones Industrial Average Return and Dividend Reinvested Return.
And, as per tradition, here are the two indices in table format for your viewing pleasure:
| 01/04/2016 Open* | 12/30/2016 Close | Annual Return | |
| Dow Jones Industrial Average Total Return | 35735.16 | 41619.65 | 16.47% |
| Dow Jones Industrial Average Index | 17405.48 | 19762.6 | 13.54% |
*If you instead count from the close last year, the returns are 16.50% and 13.42%, respectively. We prefer the 'contained in the year' methodology on the site, but know there is more than one way to calculate this.
As always, I hope this was enlightening. You've got to count those dividends.
See DJIA returns in other years:
What are your Dow - price and dividend reinvested - return predictions for 2017? Does your brokerage let you reinvest dividends for cheap... or free?
The S&P 500 Price index returned 9.84% in 2016 - and that is the number you'll see quoted most often in the press. However, a more extensive calculation including dividends reveals that the true 2016 S&P 500 return was roughly 12.25%.
We know... if you've been following us for a while, we tend to beat the dividend reinvestment drum quite a bit. For the vast majority of investors (if not 100%) it's the actual benchmark to check against.
Although dividend timing, fees, slippage, taxes and other factors will cause individual returns to vary from the 12.25% number quoted, it's a closer approximation than price returns. Assuming price returns are accurate is also assuming that investors in some way discard their dividends. Unless investors are using burning dividend checks to heat their houses, this can't be accurate.
We get these numbers from S&P Dow Jones Indices, the owner of the S&P 500. They estimate the effect of immediately reinvesting dividend payments of S&P 500 companies in the index.
Although DQYDJ doesn't have calculators with daily resolution, we have built some tools to look at monthly total returns and the S&P 500:
2016 S&P 500 Return and Total Return
Simply including some accounting for dividends was the difference between a 'single digit' and a 10+% return on the S&P 500. Make sure you use the right one when you're benchmarking your own portfolios (and be sure to account for your own dividends!).
Here are the exact numbers for the S&P 500 in 2016. We used the opening price on 1/4/2016 and the closing price on 12/30/2016 for these calculations. (Ed: As pointed out by Sagitta in the comments, another methodology would be to use the close price last year as the start point - in that case you'd be looking at ~ 11.96% gain).
| 01/04/2016 Open | 12/31/2016 Close | Annual Return | |
| S&P 500 Total Return | 3811.74 | 4278.67 | 12.25% |
| S&P 500 Index | 2038.20 | 2238.83 | 9.84% |
See other S&P 500 annual returns:
Where do you see the S&P 500 going in 2017? Will it do as well as in 2016?
On this page is a Dow Jones Industrial Average Historical Return Calculator. It shows the Dow's annualized rolling returns across common holding periods, plus any custom period you type in. You can toggle dividend reinvestment, adjust for inflation, and switch the chart between a returns-over-time view and a percentile distribution view.
The default view shows the Dow's annualized total returns (dividends reinvested, nominal), and everything updates as you change a setting – in real-time.
Here's what each control does:
Below is a static reference table of Dow rolling returns across the canonical holding periods. Both price return and total return (read: dividends reinvested) versions are shown. The numbers come from monthly-average Dow closes going back to 1896.
| Holding Period | Worst | Best | Median | Average | Most Recent | Windows |
|---|---|---|---|---|---|---|
| Price return (no dividends) | ||||||
| 1 Year | -67.80% | 117.28% | 7.66% | 7.67% | 19.01% | 1550 |
| 3 Year | -48.78% | 39.38% | 6.62% | 6.06% | 14.49% | 1526 |
| 5 Year | -24.33% | 31.30% | 6.12% | 5.71% | 8.21% | 1502 |
| 10 Year | -9.17% | 16.40% | 5.20% | 5.46% | 11.10% | 1442 |
| 20 Year | -3.45% | 14.07% | 5.69% | 5.33% | 7.96% | 1322 |
| 30 Year | -1.16% | 10.09% | 5.32% | 5.47% | 7.59% | 1202 |
| Total return (dividends reinvested) | ||||||
| 1 Year | -65.32% | 129.49% | 11.94% | 12.27% | 19.92% | 1550 |
| 3 Year | -45.70% | 44.69% | 10.89% | 10.63% | 16.22% | 1526 |
| 5 Year | -20.21% | 36.96% | 10.74% | 10.27% | 10.02% | 1502 |
| 10 Year | -4.70% | 20.69% | 9.44% | 10.06% | 13.24% | 1442 |
| 20 Year | 1.50% | 18.26% | 9.66% | 9.96% | 10.42% | 1322 |
| 30 Year | 4.46% | 14.23% | 10.22% | 10.12% | 9.94% | 1202 |
Recent daily Dow Jones Industrial Average prices come from the Federal Reserve's DJIA series on FRED, with each monthly value being the average of that month's daily closes. Per-share monthly dividends are derived from the gap between the Dow price index and the S&P DJI total-return DJIA index, allocated across the months of each quarter. Because we use monthly averages, the numbers here will differ slightly from quoted Jan-open-to-Dec-close figures in volatile years. For those, and for my methodology populating (and estimating) historical Dow Jones index levels and dividend payouts, see DQYDJ's year-specific Dow Jones return posts.
A rolling return is the annualized return over a fixed-length holding period, calculated for every possible starting point in the dataset.
Take a 20-year rolling return: instead of one number for "the Dow's 20-year return," you get a number for every overlapping 20-year window in the data – the 20 years ending May 1916 (the first window that fits, since the Dow's history starts May 1896), then ending June 1916, ending July 1916, and so on, all the way to today. For the Dow that's over 1,300 windows. Each one is annualized so the 20-year, the 5-year, and the 30-year all sit on the same scale.
The annualized return formula:
r_{\text{annualized}} = \left(\frac{V_{\text{end}}}{V_{\text{start}}}\right)^{12/N} - 1Where Vstart and Vend are the index levels (or the dividend-reinvested totals) at the start and end of the window, and N is the number of months in the window.
One thing worth saying while you're here: the financial press loves to dunk on the Dow for being price-weighted instead of market-cap-weighted. The criticism is real on paper – a $500 stock moves the index more than a $50 stock regardless of the underlying company's size. But the long-run numbers above don't punish the Dow for the methodology quirk. Since the Dow's start in May 1896, the price-weighted Dow and the market-cap-weighted S&P 500 have produced total-return CAGRs within 0.02 percentage points of each other over the same 130 years (10.18% vs 10.16%). Two basis points. The critique is overcooked in practice.
Flip to the Return Distribution view for the wider point: whatever the index committee is doing, holding period dominates index construction. The Dow's 1-year rolling line stretches from −65% (the year ending July 1932) to +129% (the snapback right behind it), but the 30-year line barely moves – its worst case is positive in every single 30-year window on record (+4.5%, somehow still positive when the window ended in the depths of 1932), and its best case caps out around +14% (the post-war run ending 1962). Pick your weighting method, then pick a long horizon. The horizon does most of the work.
Time in the market dramatically narrowed the range of outcomes. Past performance doesn't guarantee future returns, but it might be suggestive – my personal bet is on time in the market.
On this page is a S&P 500 Historical Return Calculator. It shows the S&P 500's annualized rolling returns across common holding periods, plus any custom period you type in. You can toggle dividend reinvestment, adjust for inflation, and switch the chart between a returns-over-time view and a percentile distribution view.
The default view shows the S&P 500's annualized total returns (dividends reinvested, nominal), and everything updates in real time as you change a setting.
Here's what each control does:
Below is a static reference table of S&P 500 rolling returns across the canonical holding periods. Both price return and total return (dividends reinvested) versions are shown. The numbers come from monthly-average S&P 500 closes going back to 1871.
| Holding Period | Worst | Best | Median | Average | Most Recent | Windows |
|---|---|---|---|---|---|---|
| Price return (no dividends) | ||||||
| 1 Year | -65.61% | 124.15% | 7.31% | 6.51% | 23.74% | 1854 |
| 3 Year | -43.97% | 33.61% | 5.94% | 5.28% | 19.75% | 1830 |
| 5 Year | -22.27% | 27.61% | 5.08% | 5.05% | 11.98% | 1806 |
| 10 Year | -9.14% | 16.62% | 4.46% | 4.90% | 13.60% | 1746 |
| 20 Year | -3.46% | 14.18% | 4.12% | 4.73% | 9.33% | 1626 |
| 30 Year | -1.87% | 10.40% | 5.45% | 4.87% | 8.37% | 1506 |
| Total return (dividends reinvested) | ||||||
| 1 Year | -62.28% | 139.81% | 11.30% | 11.02% | 24.84% | 1854 |
| 3 Year | -40.20% | 39.67% | 9.95% | 9.77% | 21.22% | 1830 |
| 5 Year | -17.31% | 33.66% | 9.79% | 9.55% | 13.49% | 1806 |
| 10 Year | -4.02% | 21.17% | 8.75% | 9.40% | 15.44% | 1746 |
| 20 Year | 2.05% | 17.95% | 8.17% | 9.26% | 11.37% | 1626 |
| 30 Year | 3.64% | 14.32% | 9.93% | 9.48% | 10.29% | 1506 |
S&P 500 monthly prices, dividends, and CPI come from Robert Shiller's compiled dataset, which extends back to 1871 by splicing the modern S&P 500 onto its pre-1957 predecessor indexes. Each monthly price is the average of that month's daily closes (the standard Shiller convention). Because we use monthly averages, the numbers here will differ slightly from quoted Jan-open-to-Dec-close figures in volatile years. For those, see DQYDJ's year-specific S&P 500 return posts.
A rolling return is the annualized return over a fixed-length holding period, calculated for every possible starting point in the dataset.
For example, a 10-year rolling return doesn't just give you one number... it gives one number for the 10 years ending in every single month, going back as far as the data allows. For this dataset, it's hundreds of overlapping 10-year windows, each annualized so they are comparable even for other rolling return periods.
The annualized return formula:
r_{\text{annualized}} = \left(\frac{V_{\text{end}}}{V_{\text{start}}}\right)^{12/N} - 1Where Vstart and Vend are the index levels (or the dividend-reinvested totals) at the start and end of the window, and N is the number of months in the window.
Flip to the Return Distribution chart view and you'll see the foundational case for long-term equity investing in one chart: as the holding period extends, the spread of returns compresses dramatically.
The 1-year line stretches from a worst case of around −62% (the year ending June 1932) to a best case above +139% (the snapback ending July 1933). Pretty volatile, indeed... but the 30-year rolling return line barely moves. Its worst case has been positive in every single 30-year window on record (+3.6%, even when the window ended in the depths of 1932), and its best case maxes out around +14% (the dot-com-peak run ending July 2000).
Time in the market dramatically narrowed the range of outcomes. Past performance doesn't guarantee future returns, but it might be suggestive – my personal bet is on time in the market.
Many other sites report that the NASDAQ returned +5.19% in 2015. On the contrary: with dividends included and reinvested, the 2015 NASDAQ Return was +6.40%.
Although including dividend reinvestment didn't switch a supposed loss into a gain (like it did with the S&P 500's 2015 return and the Dow Jones's 2015 return), it does show a nice bonus over what many financial media sites are quoting.
We love to do these sorts of articles not only to lecture the financial media, but to point out that the common knowledge is wrong on this point. Since investors in stocks and mutual funds will be receiving dividends, unless said investors are disposing of their checks in the garbage or the fireplace we need to make some sort of effort to factor them in.
This site has been banging this drum since early 2012, when we first released our S&P 500 Reinvestment Calculator. That calculator has monthly resolution and goes back to well before the S&P 500 actually existed, thanks to the work of Robert Shiller.
Unfortunately, we don't have a similar calculator for the NASDAQ - but put a pin in it, it would be a definite nice to have. However, for shorter time periods we can use NASDAQ's own total return index, as we did here.
We like to get our data on the NASDAQ's total return from Marketwatch. Once you include the NASDAQ and the NASDAQ Total Return Index, you get a graph that looks like this:
2015 NASDAQ Return: Total vs. Index
And, as per tradition, the same data in chart form:
| 01/02/2015 Open | 12/31/2015 Close | Annual Return | |
| NASDAQ Total Return | 5284.13 | 5622.56 | 6.40% |
| NASDAQ Index | 4760.24 | 5007.41 | 5.19% |
Over long periods of time, dividends actually end up dominating total return data since there is a compounding effect with more and more purchased over time. It ends up being an absurd amount - from 1950 to 2012, almost 90% of the total return on the S&P 500 was due to reinvested dividends.
So, yes, we're going to be exacting in these pieces. I hope this helps!
Here are NASDAQ returns in other years:
Key questions:
The Dow Jones Industrial Average did not return -2.23% in 2015, although that is the number you see reported in the media. Adjusted for dividend reinvestment, the 2015 Dow Jones Industrial Average Return was actually +0.19% in 2015 - a narrow gain instead of a headline loss.
As we pointed out in our similar article on the S&P 500's 2015 return, it is unrealistic for media sources to report index only returns. Many stock holders will automatically reinvest any dividends they receive, whether through DRIP programs, brokerage settings, or mutual fund features - as far as I know, there are no investors who merely throw out all the dividend checks they get in the mail. (Feel free to provide a counterexample!).
That means that, yes, the most commonly quoted returns on the Dow Jones Industrial Average and other indices will be artificially low. It's especially silly since S&P Dow Jones Indices, the publisher of the Dow Jones Industrial Average (and the S&P 500, at that) publishes a Dow Jones Total Return Index which accounts for dividends which are 'immediately' reinvested. Yes, an investor might face transaction fees, management costs, and timing concerns - not to mention taxes - depending on their account type and securities held. Regardless, this index is closer to the truth than pretending dividends don't exist.
As luck has it, you're in the right place for a Dow Jones reinvestment calculator, which has monthly resolution (and CPI adjustment if you want to try to account for changing price levels).
Marketwatch has some great charting features where you can use the Dow Jones Total Return Index. Side by side with the DJIA index itself, here's how the two diverged in 2015:
2015 Dow Jones Industrial Average Return: Total vs. Index
And, as per tradition, here are the two indices in table format for your viewing pleasure:
| 01/01/2015 Open | 12/31/2015 Close | Annual Return | |
| Dow Jones Industrial Average Total Return | 35657.97 | 35726.03 | 0.19% |
| Dow Jones Industrial Average Index | 17823.07 | 17425.03 | -2.23% |
Once again, I hope this was an enlightening post, shining the spotlight on a very curious media habit. Turns out things really aren't always what they seem in the financial media!
See DJIA returns in other years:
Although many sources will report that the S&P 500 returned -0.73% in 2015... if you include dividend reinvestment, the 2015 S&P 500 Return was actually 1.19%.
Including dividends is the difference between reporting a negative return and a positive one.
As we point out every year, most financial publications will report a lower return on the S&P 500 than a buy & hold investor would actually experience. Most stories leave out the effect of reinvesting dividends and distributions - the act of buying more shares of a security when that security returns money to shareholders.
Logically, this doesn't make much sense - even if investors aren't reinvesting dividends, they aren't using their dividend checks to heat their homes by throwing them in a fire - making an attempt to account for dividends is a necessity. S&P Dow Jones Indices, the owner of the S&P 500, publishes an index called the "S&P 500 Total Return Index" specifically for this purpose. The S&P TR reports how investors would have performed had they immediately reinvested dividends.
We maintain two calculators which do the math for you with monthly resolution:
2015 S&P 500 Return: Price vs. Index
So there you have it - simply choosing how to report the index's returns made a massive difference this year, literally the difference between making and losing money. Since the psychological difference of a loss with even a small gain is so great, we hope you'll agree with our assessment - you need to account for those dividend checks!
| 01/01/2015 Open | 12/31/2015 Close | Annual Return | |
| S&P 500 Total Return | 3776.49 | 3821.6 | 1.19% |
| S&P 500 Index | 2058.9 | 2043.94 | -0.73% |
See other annual S&P 500 returns:
For those of your with a crystal ball or a need to answer some questions, chew these ones over: