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Most investors spend their lives focus on price.
Watching tickers move up and down every day.
But there’s a problem with that…
in the short and medium term, price just reflects the market’s mood.
As Ben Graham told us:
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The ‘long run’ can be much longer than you think.
Watching price is volatile, it’s emotional, and it often has very little to do with what a business is actually worth.
It sets you up to make emotional decisions - buying high and selling low.
This is a lot of the reason that the average investor tends to underperform.
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If we want to build lasting wealth without the stress, we need to focus on more than price.
Total Return
Total return looks at more than price.
It’s generally defined as Capital Gains (Price Growth) + Dividends.
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The financial industry treats these two things as equal, but there are important differences.
Price appreciation is theoretical, until you sell your shares.
It’s paper profit that changes constantly while the markets are open.
Dividends are the only tangible link between you and the business’s earnings.
They are cash in your hand.
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They represent an actual business outcome.
Profit delivered to your account.
Just look at the difference between the dividends and price for Genuine Parts Company.
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The stock price at the beginning of the chart is $85.
If you bought then, between 2015 and 2025 you could have sold those shares for anywhere between a 43% loss and a 120% gain.
But you got paid a bigger dividend every single year.
Multiple Roads to Rome
Even though I think these differences are important, the investment industry doesn’t.