lukestein’s Twitter Archive—№ 2,118

1/5. So here are a few news articles about the S&P 500’s performance last year. And some slides from my undergrad Principles of Finance class. Pop quiz: What was the rate of return on S&P 500 stocks in 2018? WRONG ANSWER: –6.2%. Because dividends.
Permalink On twitter.com ♻️ 10 Retweets ❤️ 29 Favorites 2019 Apr 4 Mood -2 🙁

…in reply to @lukestein
2. I use a cool portfolio visualization tool called @PersonalCapital to let me see what’s going on with my various investments and compares to benchmarks👇. Wait a second! Even though the S&P 500 *index* fell 6.2% last year, those stocks paid about 1.8% in dividends. R≈-4.4%!
Permalink On twitter.com ♻️ 4 Retweets ❤️ 4 Favorites 2019 Apr 4 Mood +1 🙂

…in reply to @lukestein
3. I started to worry that @PersonalCapital was benchmarking *returns* against a *price change*. You can imagine why an advisor¹ might want to set themselves up for an unfair fight by ignoring stocks’ ~1.9% div yield. ¹I don’t use PC for advice, just viz. @lukestein/1112947221115232256
Permalink On twitter.com ♻️ 4 Retweets ❤️ 2 Favorites 2019 Apr 4 Mood -5 🙁

…in reply to @lukestein
4. But the story has a happy (?) ending: @PersonalCapital apparently *also ignores dividends in calculating MY performance* 🤦‍♂️ Comparing this to SPX is a (rotten) apples-to-(rotten) apples comparison. And PC is implicitly penalizing premium bonds and high-DY stocks.
Permalink On twitter.com ♻️ 4 Retweets ❤️ 9 Favorites 2019 Apr 4 Mood -6 🙁

…in reply to @lukestein
5/5. It’s not always easy to get finance right. (Even personal finance. Especially personal finance?) It’s not easy to get UX right. But as a producer or consumer of personal finance data, you should know what your data is, and think about the pitfalls of misinterpretation.
On twitter.com ♻️ 4 Retweets ❤️ 13 Favorites 2019 Apr 4 Mood 0