Chapter 2. High Dividend Stocks: Bonds with Price Appreciation?
Sam's Lost Dividends
Once upon a time, there lived a happy and carefree retiree named Sam. Sam was in good health and thoroughly enjoyed having nothing to do. His only regret was that his hard-earned money was invested in treasury bonds, earning a measly rate of 3% a year. One day, Sam's friend, Joe, who liked to offer unsolicited investment advice, suggested that Sam take his money out of bonds and invest in stocks. When Sam demurred, saying that he did not like to take risk and that he needed the cash income from his bonds, Joe gave him a list of 10 companies that paid high dividends. “Buy these stocks,” he said, “and you will get the best of both worlds: the income of a bond and ...
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