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Beating the market is easy. Just understate its performance.

Various investment promoters are touting their stock-picking prowess by comparing their returns, including dividends, to the Standard & Poor's 500 Index ($INX) without dividends.

It is a lot easier to beat the market when you don't count its entire return.

Over the past decade, according to Standard & Poor's, the S&P 500 benchmark gained an annual average of just 0.72% without dividends. But with dividends included, the S&P's total return reached 2.81% annually.

"There are two main ways to earn returns: price appreciation and income," says Stephen Horan, head of private wealth management at the CFA Institute. "If you systematically exclude one of them from your benchmark while knowing that your strategy includes them, you're making a fundamentally unfair comparison."

When mutual funds compare their return to that of a stock index, they are required by the Securities and Exchange Commission to include dividend income in the performance of the index. Money managers abiding by voluntary guidelines known as the Global Investment Performance Standards must do the same.

But financial advisers and newsletter publishers, among other investment pros, aren't always covered by such rules.

An article posted on the CME website last November featured a chart comparing the returns on a commodity-trading index to the S&P 500 -- with a huge gap in favor of the commodity traders.

A CME spokesman says the chart was "rather misleading" since it showed the S&P 500 without dividends, incorrectly making stocks look "vastly inferior," he says. "We disagree with the article and will be taking it down from our website."

Allan Roth, a financial planner at Wealth Logic in Colorado Springs, Colo., estimates that at least 20 times a year he sees account statements from financial advisers comparing a client's returns, with dividends, against those of market benchmarks without dividends.

The Aorda portfolios, run by American Optimal Advisors of Gainesville, Fla., compare their results to the S&P 500 without dividends. Aorda's website shows a cumulative gain for the S&P since January 2005 of 12.5%, although the index returned 28.1% with dividends.

"I agree with your arguments," concedes portfolio manager Stan Uryasev, who says he will be clarifying his disclosures. "Thanks a lot for bringing (the issue) to my attention."

In April, TheStreet.com sent out an email urging readers to subscribe to Action Alerts PLUS, a trading-tip service from TheStreet's co-founder and CNBC host Jim Cramer. Douglas Zitzmann recently posted it on his Fumbled Returns blog.

Sent out under Cramer's name, with the subject line "My portfolio is CRUSHING the S&P 500," the email said Action Alerts PLUS is "producing some truly incredible results." From Jan. 1, 2002, to April 1, said the email, the portfolio's "total average return has averaged more than DOUBLE the return of the S&P 500." An accompanying bar graph showed the S&P 500 returning 15.5%, versus 39.2% for Cramer's portfolio.

Incredible indeed, if you include dividends for Cramer's portfolio and exclude them for the S&P 500. With dividends, the total return of the S&P over the same period was 38.3%. Viewed this way, Action Alerts PLUS didn't double the market's return; it squeaked past by a cumulative 0.9 percentage point. That is before taxes and before the annual subscription fee ($299.95 the first year).

"I do not do anything but manage the portfolio," Cramer replied in an email response to questions from The Wall Street Journal. He referred inquiries to Gregory Barton, general counsel at TheStreet. Barton confirmed in an email that Cramer's performance does include dividends while the S&P 500 return cited in the promotion doesn't.

Asked in an interview whether the comparison was fair, Barton said that "we have recently added an update to the AAP website to show performance information for the S&P 500 plus dividends." He later said the update was posted "within the past week."

TheStreet isn't alone among newsletter publishers. Consider the Proactive Fund Investor, an online service edited by Bill Donoghue and distributed by MarketWatch, which, like The Wall Street Journal, is published by Dow Jones. The newsletter recently compared its "total return" with that of the S&P 500 -- without counting the dividends on the index.

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"We don't make a practice of promoting the performance of (our) newsletters," says MarketWatch Editor-in-Chief David Callaway, "because it inevitably leads to questions of accuracy."

To approximate Cramer's return, you would have had to make an average of 774 trades annually over the past three years, Barton said.

Meanwhile, you could have bought and held an S&P 500 index fund and then done utterly nothing except reinvest your dividends. And you, too, would have more than doubled the market's return -- calculated without dividends.

This article was reported by Jason Zweig for The Wall Street Journal.