In this segment from the Rule Breaker Investing podcast, David Gardner dips into the mailbag and resolves the confusion of a Foolish service subscriber on the subject of benchmarks.

The Fool likes to use the Standard & Poor's 500 index as its primary benchmark because you need to know if you're beating the broader market with your individual investing choices, and that's a fine measure. But the index numbers you might find elsewhere only factor in stock prices, which leaves out a key point from any return on investment calculation: dividends.

A full transcript follows the video.

This video was recorded on Aug. 30, 2017.

David Gardner: Mailbag Item No. 1. I'm taking Blake Foster and making him my leadoff batter this week, because this one's so easy to answer so it gets the momentum going. "Hi, David. My name is Blake Foster. I'm currently a member of Motley Fool Stock Advisor. First of all, I love everything your company offers. Your slew of podcasts, investing services, great employees. The latest investing news at" Thank you very much, Blake.

"I just have a question on how you calculate the S&P return on your Stock Advisor recommendation list. Looking at Costco, the return is 401.8% which is correct." That would be my brother Tom's pick. Nice job, Tom. Costco held over many years, now.

"The return is correct, but when I look at the S&P 500 return, I'm confused, because as of April 12, 2002, which is when Costco was picked and so scoring it against the market the S&P was at..." And he gives a price. And then says, "As of this August, it was at another price, and that would be a total return," he says, "of 123% and not 204%," which is how we list it in Stock Advisor.

Blake says, "Am I missing something or are you calculating this in a different way than I am? Also," he says at the end, "I live in Minnesota. I was wondering if you offer any telecommute jobs as I'm not able to convince my wife and kids to move to Virginia." Well, I know we're both Minnesota Twins fans so, Blake, keep the faith.

But back to your question. This is a rather easy one for me to answer. What we're doing on Motley Fool Stock Advisor and each of our services that uses The Standard & Poor's 500 -- which represents five hundred of the largest companies in America. Well, actually it's called by Standard & Poor's, the publishing company, but we use that as a proxy for the overall moves of the market -- as our benchmark is we're including dividends. So when you take a version of the S&P 500 -- with those 500 companies [that] pay a dividend every year -- and if you account for that in the return of the S&P 500, and then you do it over 15 years or so, isn't it interesting, Blake, to see that without dividends the S&P would have returned, as you say, 123%.

But with dividends, it actually has returned 204% and yes, we use that higher measure, that more demanding measure to compare the performance, in this case, of Costco or any of the stocks that we pick in Stock Advisor or the whole Stock Advisor service. We're comparing against the harder benchmark, the one that's truer, and that is if you had the dividends accounted for in those stock picks.

So you can see the value of investing in stocks with dividends when you see that higher number over the course of the long term. So that's what we're doing, Blake. I hope it's clear and I hope you agree with it.