does not mean it will happen each and every year.
Depending on what type investments you make, most
dividends are re-invested.
Even in an index fund,
there is a possibility that you can lose money if the
stock market goes down.
I'm confused about index funds rate of return. I heard the average rate of return for the S&P 500 over 30 years is 8%. Is this return in form of dividends? Does the rate of return get reinvested or something? For example, if you invest a $1000 in the SP 500, in a year does that turn into $1080? In the next year, does that $80 get reinvested? So does it turn to $1166.44?
