In this video I explain the importance of Total Return in selecting stocks and shares. Some shares pay high dividends and some are focused on capital growth. In this investing tutorial, I introduce and explain a simple mathematical formula which combines both dividends and capital growth to calculate total return to shareholders over a 5 year period. I demonstrate this investing strategy with the iShares Core FTSE 100 ETF to provide a baseline return and then I look at the total return from individual companies such as Unilever and Diageo. I also reveal a new FTSE 100 company I am investing in based on analysis using this formula.
I invest mainly in FTSE 100 companies which have good cash flows and economic moats. I hold these companies for the long term and reinvest any dividends received. Dividends provide shareholders with passive income streams which when reinvested can compound over time to generate wealth, beat inflation and eventually achieve financial freedom and the ability to retire early.
In addition to individual shares I have recently invested into Exchange Traded Funds (ETFs) as these give me greater diversification and reduce risk. I hold both the iShares Core 100 ETF and the iShares S&P 500 ETF to gain exposure to the American market.
Investing in shares is one of the best things I have done and I wish to share my experience over the years with others so that they can acquire the skills needed to grow their wealth and beat inflation.
Disclaimer
The information presented on this channel and in these videos is for entertainment purposes only and is not financial advice. The price of shares can go down and well as up. Historical returns are not a guide to the future. Investing in shares is not appropriate for everyone, so please do your own research.
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