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After a discussion yesterday about the relative growth of the All Ords v Dow Ind Index, I thought these figures may interest other Fools. They are the Index figures for 23 or 25 March in each year:

All Ords Dow Ind

1987 1652 2363
88 1432 2067
89 1491 2243
90 1596 2704
91 1425 2859
92 1586 3261
93 1660 3461
94 2140 3869
95 1915 4087
96 2245 5643
97 2402 6820
98 2779 8906
99 2988 9890
2000 3228 10866

The things that stand out to me are:

* While the All Ords hasn't quite doubled since 1987,the Dow has more than quadrupled.
* After the 1987 crack in both markets, the All Ords was flat for 6 years while by 1993, the Dow was already 46% up on 1987.
* 1994 was good for the All Ords (+29%) but then the market went to sleep again until 1997. The Dow over the same period nearly doubled.
* The performance of the Dow from 1995 (21%pa) has been nothing less than spectacular.
* The Dow has clocked up 12.5% pa growth in share prices since 1987.
* On these figures, the All Ords is scarcely stretched. Even an 8%pa growth in share prices since 1987 would have had the All Ords at 4500 today !
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What you must bear in mind is that the companies listed on the US markets operate in a totally different fashion than the Oz markets.

In the US, profits are basically retained within the company and re-invested ... in Oz (due to our taxation system) the majority of profits are dispersed in dividends thereby reducing the capital profits base.

Therefore if you take dividends out of the equation there would be a similar hike in the All Ords to that of the US markets.
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Could you/someone comment on the changes in, and
relevance of, the All Ords Accumulation Index, then,
please?
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Dear Abedengo

the All-Ords Accum Index takes inclusion of dividends paid which is probably more relevant as Australian companies pay a high yield. This is often the index fund managers set a benchmark against.

lance
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