Several sources suggest 70% or so of Stock Market (S&P 500) gains are from Dividend payments (according to several sources, below) But dividend payments average for the S&P 500 have been about 1.9 to 3% for the last 30 years. But total return is around 9.5%. That suggests that Dividends are about 1/3 of gains.

Background info

Kevin O'leary (of Shark Tank fame) claims that 70% of stock market gains are from Dividends (in this https://youtu.be/IJXt0GX6QjM?t=95) The article from Seeking Alpha supports this.

BUT... the historic return on the S&P500 is about 9%. And Dividends tend to be about 2% (average for the S&P500). That would be 2/9th or <20% of S&P500 gains.

I'm trying to verify that.

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During the 90 years between 1871 and 1960, the S&P 500 annual dividend yield never fell below 3%. In fact, annual dividends reached above 5% during 45 separate years over the period. Of the 30 years after 1960, only five saw yields below 3%. The sharp change in S&P 500 dividend yield traces back to the early to mid-1990s. For example, the average dividend yield between 1970 and 1990 was 4.03%. It declined to 1.90% between 1991 and 2007. After a brief climb to 3.11% during the peak of the Great Recession of 2008, the annual S&P 500 dividend yield averaged just 1.97% between 2009 and 2019.

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    $\begingroup$ How do you plan to handle the re-investment of dividends in your calculation? Probably that is where most of the discrepancy between your 2 estimates comes from. $\endgroup$
    – nbbo2
    Mar 31, 2021 at 15:56
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    $\begingroup$ I would start by looking at the high-level differences between the S&P 500 Total Return, S&P 500 with adjusted closes, and S&P 500 with unadjusted closes. $\endgroup$
    – amdopt
    Mar 31, 2021 at 16:36
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    $\begingroup$ Imagine 3 people: Mr. A, B, C invested 1000 USD in SP500 X years ago. Mr. A throws away the dividends when he receives them (or they are seized by the govt through a 100% dividend tax). Mr. B puts the dividends in a lockbox where they earn no return, today he has the original (appreciated) shares that A also has, plus a lockbox full of cash. Finally Mr. C reinvests the dividends in additional shares (which rise in value and even generate additional divs), he earns the Total Return and is wealthier at the end than B or A. Usual comparision is between A and C's ending wealth. $\endgroup$
    – nbbo2
    Mar 31, 2021 at 18:17
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    $\begingroup$ You could try the Shiller data - econ.yale.edu/~shiller/data.htm $\endgroup$
    – user42108
    Mar 31, 2021 at 18:53


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