There are three series presented here:
1. The January average of a "common-stock" index.
2. The annual yield on that index for that entire year.
3. The January average of the "accumulated" value of the index.
The accumulated index assumes that upon receipt of each cash dividend, the investor holding the portfolio of the stocks in the index would reinvest them in the portfolio. It does not take into account fees or taxes.

From 1871 to 1926 the data for these indexes were constructed by the Cowles Commission and are found in Common-Stock Indexes 2nd edition, Principia Press, Inc., Bloomington, Indiana 1939. The series used from this report are P-1 (pp. 66-67), Ya-1 (pp. 372-373), and C-1 (pp. 168-169).

From 1926 to the present, the data are from various reports of Standard & Poors. The index is a consistent measure over the period as stated on page 120 of the 1972 Annual Edition of Standard & Poor's Security Price Index Record: "From January 1918 to date, these indexes are a monthly average of the Standard & Poor's Price Indexes. The Indexes for earlier years (from 1871 to 1918) have been converted to a 1941-43 base from the Cowles Commission Stock Price Indexes. The Cowles Commission Indexes are an extension of the Standard & Poor's Indexes, the same method of construction being used, as far as possible, the same companies."

To construct an accumulated index it is assumed that a portfolio of the stocks that make up the composite index was bought in January of an initial year for the average price of them during that month. It is then assumed that each year thereafter, the dividends on the stocks in the portfolio are received at the end of the year and are used to buy more of the stocks (in that portfolio) at their new prices in January of the following year. No money is taken out of the portfolio and there is no allowance for any taxes or commissions that might be need to paid.

Portfolio(year2) = Portfolio(year1) times (index(year2))/(index(year1)) + Portfolio(year1) times yield(year1).

The portfolio is assumed to be held indefinitely. The accumulated index presented here assumes one dollar was invested in the January of 1871.

Please read our Note on Data Revisions.

Samuel H. Williamson, "S&P Index, Yield and Accumulated Index, 1871 to Present," MeasuringWorth,
URL: http://www.measuringworth.com/datasets/sap/

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