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Excel Spreadsheet Model for Reinvesting Dividends

For versions of Excel: Excel for Office 365, Excel for Office 365 for Mac, Excel 2016, Excel 2016 for Mac, Excel 2013, Excel 2011 for Mac, Excel 2010, Excel 2008 for Mac, Excel 2007

Compare Constant Dollar Investment with Dividend Reinvestment

A significant portion of total return is derived from the reinvestment of dividends, but there really is no simple formula that can be implemented to model reinvestment. Instead, one approach is to keep track of the investment and dividends in a tabular format. This tutorial demonstrates such a spreadsheet model in Excel estimating the nine-year annualized return for SPY, the S&P 500 ETF for both constant dollar investment, and reinvesting dividends.

You can download the Excel file used in the video here.

Dividend Reinvestment vs. Constant Dollar Investment