Where capital appreciation and long-term yields are our investment goals, putting our hard-earned money in a company that grows (its earnings) is probably more important than one that gives out high dividend payout in terms of yield (yet has poor cash flow and does not grow its revenue much).

However, we should not simply rule out yield in our buying consideration as companies that give good dividend yields are generally less volatile than those that don’t. This is because fund managers in times of bad market would rather sell off the shares of the company that give less dividend before the one that do if both trades at the same price [source article here]. So we can infer that good yield could give some kind of cushioning against extreme price drop in times when the stocks market crashes.

The difficulty always lies in spotting that healthy ‘chicken’ to lay our ‘golden eggs’. The golden eggs here refers to BOTH capital appreciation and dividends …