Matthew Young, President and CEO, writes his clients letters keeping them abreast of changes that can affect the portfolios with Richard C. Young & Co., Ltd. You can sample some of these letters below.
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It took nearly 18 years for the Dow Jones Industrial Average to go from 10,000 to 20,000. Factoring in time and return, that works out to a compounded annual gain of 4.2%, not including dividends. And that’s the key—not including dividends. In fact, while the Dow doubled from its March 29, 1999, level, when you factor in dividends, the total return becomes 205%. In other words, more than half the return of an investment in the Dow during this period was delivered by dividends.
My dad has written for decades that the two most important words in investing are compound interest. Over time, the power of compounding is profound. One of Dad’s oldest friends in the investment business, Dave Hammer, recently relayed a story about the power of compounding that I would like to share with you.
The Wall Street Journal recently profiled the former CEO of the Cato Institute, John A. Allison, who was rumored to be a candidate for Treasury Secretary in the Trump Administration. Who better to help the new administration reinvigorate free-market capitalism in America than the former head of America’s leading free-market think tank?