The 8th Deadly Sin: Chasing Yield

I distinctly remember, as a child, how excited I was to learn that companies paid stock holders money for doing nothing. Putting dividends in a context I could understand, I was told dividends were a lot like my allowance. I now understand dividends to be one of the ways companies share their profits with shareholders, but that would have flown right over my 12 year old head. Dividends have occupied a warm place in my heart ever since. A few short years later, when I began managing my own small investments, I was amazed at the variety of companies I could invest in. If those companies were only viewed through the lens of one metric, it would have been clear cut which companies would likely make the best investments. All other things being equal, companies with lower P/E values or lower book values appealed to me. I... Read more