Answer:
A $100 investment in the S&P 500 in 1972, assuming reinvestment of all dividends and no additional contributions, would have grown to almost $3,726 by the end of 2018. This takes into account both stock price and dividends, with the S&P 500 having a dividend yield of about 2%.
Step-by-step explanation:
To determine the return on investment in the S& P 500, two elements must be considered: stock price and dividends. Because the S&P 500 has a dividend yield of about 2%, we must account for this additional return.
Assuming that all dividends were reinvested and no additional contributions were made, a $100 investment in the S& P 500 in 1972 would have risen to nearly $3,726 by the end of 2018. This is produced using historical data on the stock price and dividend yield of the S& ;P 500.
It is crucial to understand that the S& ;P 500 is volatile in the market, and previous performance does not guarantee future outcomes. Taxes and costs involved with purchasing and selling stocks can also have an influence on returns.
Overall, the S&P 500 has historically delivered a respectable long-term return on investment and is a popular choice for investors looking to gain exposure to the wider US stock market.