Do High Yield Stocks Mean Lower Returns?
It is a common understanding among dividend investors that high yield stocks typically have meant lower capital gains than lower dividend yield stocks. The thinking is that very high yields signal trouble with a company that ultimately leads to lower stock returns. A recent American Association of Individual Investors (AAII) article from May 2009 (subscriber status required) provided some interesting research that show that is not always the case. In fact, they show in their research that …
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