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Dividends matter

A lump sum investment with dividends reinvested back can give at least a 2 percentage point higher annualised return, compared to without it

Reinvest your dividends! Studying the Sensex data since 1996, we saw that over a 10-year period, a lump sum investment with dividends reinvested back would give at least a 2 percentage point higher annualised return compared to without it. Though a 2 percentage point difference seems small in itself, the compunded return over 10 years is certainly not.