In the Intelligent Investor graham says : ” investor should be able to count on the current 3.5% dividend return on his stocks and also an average annual appreciation of 4%. As we shall later explain this appreciation is based essentially on the reinvestments by the various companies of corresponding amount annually out of undistributed profits.”

Does this mean that average historical return of the stockmarket is 7.5% and it consist of 3.5% dividend yield and 4% of the appreciation in price which is fundamentally driven by retained earnings?

  • 1
    What's the context - is he talking about the market in general or about a specific portfolio/strategy?
    – D Stanley
    Commented Sep 20, 2023 at 19:05
  • In chapter 1 investment vs speculation. He is talking about results to be expected by defencive investor and how to divide fund between bonds and stocks in market conditions where there is no reason to expect large up or down movements
    – Ode
    Commented Sep 20, 2023 at 19:22


You must log in to answer this question.

Browse other questions tagged .