What's the difference between dividend yield and total return?

Dividend yield is only the cash a stock or fund pays out, expressed as a percentage of its price; total return is the full picture – dividends plus any change in the share price. Focusing on yield alone can mislead you. A stock with a fat 8% yield that drops 12% in price actually lost you money on a total-return basis, while a growth fund paying almost no dividend can deliver strong total returns through price appreciation. A very high yield is often a warning sign that the market expects a dividend cut or sees trouble ahead, not a free lunch. When comparing investments or judging how your portfolio is doing, total return is the number that reflects what your wealth actually did. Chasing yield without watching total return is one of the more common income-investing mistakes, especially for retirees.