Comments on: DVY – The iShares Dow Jones Select Dividend Index

By: JOE

JOE — Tue, 08 Mar 2011 22:09:44 +0000

Good question – The index itself, DIA or S&P, don’t include the dividend in their calculations, but when you ‘buy’ the index through an ETF the fund distributes the income. So, if you bought the SPY, you’d actually find over time you ‘beat’ the index. To take it a step further, if you start with 1000 shares and reinvest the dividend, the 1000 shares’ value will slowly lag the index, but the increase in the number of shares will more than compensate.

By: Rudy Dankwort

Rudy Dankwort — Tue, 08 Mar 2011 22:04:54 +0000

I understand the D-J index does not include dividends. So, does that mean eft’s such as DIA are ripoffs?

By: JOE

JOE — Sun, 27 Apr 2008 05:28:03 +0000

Yes, there is still the risks associated with the stock market. The comparison that I draw is this – as people see their CD returns fall, 3% or so right now and just 2.25% after ordinary income tax (at 25%), one can see the appeal of that 4.29% dividend (3.65% after the 15% dividend tax rate). But as I state in the original post, this should only be considered with long term money. As you observe, in the short term, the market goes both ways.

By: Augustine

Augustine — Thu, 24 Apr 2008 23:51:42 +0000

Well, the YTD return is more than 9% loss. Even considering the dividends, one would still net a loss. In other words, it’s still a stock equity, not comparable to the return of either T-bills or CD’s.