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While we just celebrated another all-time high in the Dow Jones Industrial Average – the S&P 500 got very close, but no cigar – the Japanese Nikkei 225 index has not set a single all-time high for 34 years. Put another way, it is still not back up to its December 1989 level. As of 18 December, it is almost 16% below its lofty peak going into the 1990s.

That, however, is grossly misleading. The Nikkei 225 is not adjusted for dividends, a fact that may come as a surprise for Norwegians whose benchmark indices have been dividend-adjusted for more than 40 years. As it happens, the same goes for the S&P 500 and the Dow Jones Industrial Average, the latter also being archaic in its composition. Total return indices have been calculated for a while now, but the headline indices are just price indices.

According to MSCI indices, Japan has delivered a total return of 44% since New Year’s Eve 1989. It’s not a lot, but it’s a lot better than a loss of 16%. Similarly, the S&P 500 and the Dow Jones have returned 10.2% and 10.6%, respectively, against headline returns of 7.9% and 8.0%. If you find this difference unremarkable, please note that adding dividends more than doubles the accumulated return over these three-plus decades. You know, compound interest.

What may be a bit more surprising, is that the number of all-time highs increases markedly when we adjust for dividends. The MSCI Japan total return index produced 80 all-time highs during this period, while of course the unadjusted index produced none. For Dow Jones, the tally rises to 898 from 689, while the S&P 500 sees an increase to 875 from 702.

Considering that total return indices have a higher rate of growth, it shouldn’t perhaps be that surprising. But I’ve noticed that many people misinterpret a large number of all-time highs. It’s taken to be a manifestation of stock market volatility, whereas in fact it is the exact opposite. After all, your savings account hits a new all-time high every single day.

Hence, don’t be scared of all-time highs. A lack thereof is a lot scarier.