I would really appreciate it if somebody can help me with the math on this one. I feel the need to apologize in advance if this errs on the dumb side. If somebody could walk me through this and make me understand what I am seeing wrong my appreciation will be great.
When we look at the S&P 500 from 1992 to 2023 according to the Motley fool
| Years | AAR |
|---|---|
| 1992 | 7.62% |
| 1993 | 10.08% |
| 1994 | 1.32% |
| 1995 | 37.58% |
| 1996 | 22.96% |
| 1997 | 33.36% |
| 1998 | 28.58% |
| 1999 | 21.04% |
| 2000 | -9.10% |
| 2001 | -11.89% |
| 2002 | -22.10% |
| 2003 | 28.68% |
| 2004 | 10.88% |
| 2005 | 4.91% |
| 2006 | 15.79% |
| 2007 | 5.49% |
| 2008 | -37% |
| 2009 | 26.46% |
| 2010 | 15.06% |
| 2011 | 2.11% |
| 2012 | 16% |
| 2013 | 32.39% |
| 2014 | 13.69% |
| 2015 | 1.38% |
| 2016 | 11.96% |
| 2017 | 21.83% |
| 2018 | -4.38% |
| 2019 | 31.49% |
| 2020 | 18.40% |
| 2021 | 28.71% |
| 2022 | -18.11% |
| 2023 | 21.90% |
The total return comes down to 351.09%, divided by 32 = which is an avg annual 10.9715% return
When we look at the stock price of S&P 500 in 1992 this was valued at 415.75
When we look at a stock price of S&P 500 in 2023 this is valued at 4,283.73
(4,283.73-415.75) divided by 415.75 = 9.3036 x 100 = 930.36% increase of the value of stock over the past 32 years, which is a 29.07% avg annual increase
That's a big discrepancy between the reported return of the S&P500 and the actual stock prices.
Where are the gaps, what am I missing, please help me make sense of things.
Thanks a lot in advance