Without financial alchemy, dividends will disappoint

clock • 2 min read

Dividend growth will continue to disappoint the market unless some 'financial alchemy' comes in to play, explains Charles Luke from the Murray Income trust.

It is a little puzzling to hear market commentators talk about the FTSE 100 approaching a 14-year high. Why do they not look at performance on a total return basis? Do they not appreciate the importance of dividends?  Examining returns over the past 14 years and including the re-investment of dividends, shows that the FTSE 100 actually hit a new high in the middle of 2005. On this basis the market is now around 75% above its price index peak.  It is for this reason that Einstein called dividends and the compounding effect of income the eighth wonder of the world. Over the last coup...

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