Major indexes like the S&P 500 are typically quoted as price-return only, excluding dividends. This means investors and the financial press are constantly looking at the wrong number, systematically understating true market performance. This leads to more negative sentiment on high-dividend days and flawed evaluations of fund performance, skewing perception and capital allocation.

Contrary to popular belief, earnings growth has a very low correlation with decadal stock returns. The primary driver is the change in the valuation multiple (e.g., P/E ratio expansion or contraction). The correlation between 10-year real returns and 10-year valuation changes is a staggering 0.9, while it is tiny for earnings growth.

Over-focusing on dividend-paying stocks for retirement income is a tax-inefficient mistake. A better strategy is to own a total market index fund, which often has higher total returns, and simply sell shares as needed. This "creates" your own income, offers more control, and is often more tax-advantageous.

Many accepted financial rules are not timeless. Stocks only began consistently outperforming bonds after WWII, and inflation-adjusted US home prices were flat for a century before 1997. This reveals that much financial advice is based on recent history, not immutable laws, making it a poor guide for the future.

Contrary to Keynes's early views, pursuing capital gains isn't inherently speculative. When a company reinvests all its profits at a high rate of return instead of paying dividends, the resulting share price increase is a direct reflection of compounding intrinsic value, not just changing market psychology.

In the 1980s, companies like Apple went public early as a fundraising necessity, allowing public investors to capture most of the growth. Today, robust private markets mean companies stay private longer, making IPOs primarily a liquidity event for insiders and VCs, with less upside left for the public.

Dividends do not inherently increase an investor's capital, as a dividend payment reduces the stock's price by the same amount. Total shareholder return is only achieved if the dividend is fully reinvested without taxes or fees; otherwise, only price appreciation grows the initial investment.

Since the 1990s, U.S. companies have returned more capital through stock buybacks than dividends. An investor focused solely on dividend yield is missing the larger part of the shareholder return story and cannot accurately assess a company's total capital allocation strategy.

Despite the narrative that dividends are a "lead weight on performance" during speculative periods, the power of compounding dividends provides extraordinary wealth-building potential. The S&P Dividend Index's long-term performance parity with the growth-oriented NASDAQ is a shocking testament to this often-overlooked strategy.