Background: The S&P 500 is an index that has consistently grown across many decades [1]. On the other hand, since the 1940s, the dividend yield has been decreasing [2]. It used to be around 6%, while in recent years, it has been around 1.5%.

Question: Why is the growth of the value of dividends significantly lower than the growth of the value of stocks in the S&P 500?

Sources:

[1] https://www.investopedia.com/ask/answers/042415/what-average-annual-return-sp-500.asp

[2] https://www.investopedia.com/articles/markets/071616/history-sp-500-dividend-yield.asp

Background: The S&P 500 is an index that has consistently grown across many decades. On the other hand, since the 1940s, the dividend yield has been decreasing. It used to be around 6%, while in recent years, it has been around 1.5%.

Question: Why is the growth of the value of dividends significantly lower than the growth of the value of stocks in the S&P 500?

Sources: