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Snap Judgment: When to Trust Your Instincts, When to Ignore Them, and How to Avoid Making Big Mistakes with Your Money by David E. Adler

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3. More About Stocks: Dividends—Behavioral Ways to Play the Dividend Game

Should you buy stocks that pay a dividend? Or is better to invest in stocks that pay no dividend? Historically, most returns from investing in stocks have come from the dividend, not from appreciation in price. After the 2008 crash, the conventional wisdom is that dividend-paying stocks are the way to go, particularly when interest rates are low. But non-dividend-paying corporations might be reinvesting their earnings to pursue great growth opportunities and therefore might show better capital appreciation, meaning these stocks are the better bet. Personal finance gurus have many answers. So do behavioral economists. They find that you may think you are playing the dividend ...

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