- read this: http://jlcollinsnh.com/stock-series/
- Stop checking your balance daily. Don't check it weekly or monthly either.
- Realize that you (and your actions) are the biggest threat to your investments. Buy and Hold
- Automate. Have contributions go into your account every pay period and remember #2.
To answer a few of your specific questions:
Historical yield is the average amount a stock or index pays out in dividends each year as a percentage of the total share price. It is in addition to gains from the increase in the stock price.
A dividend are shares that a company gives to its investors in exchange for buying and holding their stock. Normally they are given out quarterly, but a company can also issue a special dividend (like a surprise) anytime it likes. The yield tells you how many shares you will get on average from a dividend per year. So a 2% dividend will give out 2 shares for every 100 shares you own, usually quarterly (so 0.5 shares per hundred per quarter). You can get very small fractions of a share.
Since companies announce their dividends as a fixed dollar amount per share (e.g. $0.37 per share) the yield will be inversely affected by the share price. For example, if a company payed out $0.50 per share every quarter and its share price was $100 per share, its yield would be 2% ($0.50 of $100 = 0.5%, and 4x/year = 2%). If that company had blockbuster earnings and the share price went up to $200 per share the yield would now be 1%. That company can either keep a lower yield or increase its dividend to try to (roughly) keep its yield fairly constant. What they decide to do is generally a function of how much free cash they have on hand at the end of each quarter and whether they have a better use for it, like R&D or buying up a competitor. Investors like seeing dividends that hold steady or increase slowly, as its one (imperfect) metric that the company is generating cash every quarter. But, be aware that for every $ a company pays out in dividends, it is worth a dollar less, so its really a zero sum game.
If you are investing in broad market index funds you can ignore yields all together, because the yield on an index fund is the average paid out by the dozens or hundreds of companies represented in that index.
If you reinvest your dividends (highly recommended in the accumulation phase) you will own more shares over time. Compounding, however, is not just about dividends. It also includes increases in the share price. In the short term (a few years to a decade or so) increases in share price typically make up most of your gains. Over the very long term (several decades) the impact of dividends becomes pronounced, and over a human lifetime most of the gains in the market can be attributed to the dividends. That's just how the math works; the dividends themselves compound each year.
I hoep that settles you down. You are overthinking this, and worrying far to much.
No, it is not normal to be this scared. A little scared yes, but you need to relax.