Allan Roth writes on CBSMoneywatch.com that the Associated Press continues to report broad market returns without factoring in dividends, allowing Wall Street firms to make their performance look better in comparison.
Roth writes, “What is particularly frustrating for me is that, in the many years of discussion with the various folks at the AP, no one has ever disagreed with my point that reporting market returns using the S&P 500 index without dividends is misleading. Nor has anyone denied that Wall Street uses the AP numbers to make their results look good.
“I don’t believe for a minute that there is anything under the table going on that causes the AP to report in this manner. And I applaud the AP for continuing to have a dialogue with me on this issue. I actually believe the root causes for this biased reporting are ignorance and inertia.
“The ignorance comes from the widely held acceptance of the S&P 500 index as the stock market, rather than taking a step back to get all of the return of all of the market. The inertia comes from the ease of calculating the index return in the way that it has always been calculated.
“I suspect the AP will eventually begin reporting more accurate returns, though certainly not because of my influence. The reason will more likely come from the fact that many top publications, from The New York Times to the Wall Street Journal, are usually getting it right. Once it becomes the standard, the AP may be forced to follow.”
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