No. of Recommendations: 0
Are you saying that if I purchase $250,000 worth of an index fund mutual fund, I can't count on receiving $25,000 in dividends per year with a resonable degree of certainty (realizing some risk)? "

"You can assume anything you like but there exist a probablity that it will not happen."

Reply: Thanks, I'm hearing that an index fund is probably not the right vehicle for what I'm looking for...regular income at higher than bank account rates for invested funds.

"I thought the average rate of return on index funds was well over 10% during the last 10 years. Maybe I'm confusing growth and return. Is that the case?

"The total return for S&P 500 since 1926 through 1993 has been 10.49%. But there was a 10 yr period ending in 1974 where the average total return was 1.2%.

Total return for a stock is the dividends and the price appreciation of the stock. Let's say the Stock costs $10 on Dec 31, 1998. It issues a $0.25 dividend on Dec 31, 1999 and it's price has risen to
$10.50."

Reply: Thanks again. I'm getting educated.
Randy
Print the post  

Announcements

The Retirement Investing Board
This is the board for all discussions related to Investing for and during retirement. To keep the board relevant and Foolish to everyone, please avoid making any posts pertaining to political partisanship. Fool on and Retire on!
Live Video Event Monday!
The GP team is hosting a live video event on Monday at 4 p.m. ET. Don't worry if you can't make it — we'll have a replay and a transcript. Click for more!
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement