Price Vs Growth Question
So I'm trying to figure this out and hoping that it's not so obvious that I (once again) demonstrate my lack of math skills, or general, occasional stupidity.
Playing with a few of my investments I noticed that over the past 5 years the price has not moved materially but the growth has gone up nicely.
For example, according to M*, (TRPrice Equity Income Fund) PRFDX has gone down from 33.0 to 30.0 over the past five years, but the five year annual total return has been 6.9%. A similar behaving fund is TRRGX (2015 Fund)
Dividends play a part but the dividends paid are around 2.2%. So where is the rest of the growth coming from? Is the rest of it reinvested Cap Gains? Yes, the price drops dramatically each year-end (Divs&CGs paid) but then recovers in a bit.
I can understand my bond funds keeping a fairly steady price but I'm trying to wrap my head around how you can deliver decent growth--even with dividends helping--and not have an appreciation in price.
Living well is the best revenge!
Retired @ 52 in 2005