Hi Mike,

I want to make clear it’s not that dividends aren’t important, they are.

But the only thing that really matters is “total return” (dividends + stock price increase). So yes it’s a good idea to reinvest your dividends.

However, I’ve yet to see any confining evidence that focusing solely on dividend paying stocks is a rational decision.

The point is, we should be indifferent if our investment returns are primarily driven by dividends or stock price increase.

Economic policy wonk by day. Personal finance writer by night. I write about investing, debt, and all things related to money. Editor of Making of a Millionaire

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