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Perhaps a better characterization is dividends vs. capital gains. For long-term investing, does it make sense to focus on equities that don't pay dividends, assuming that the profits show up in greater appreciation in share value?

I figure that the long-term capital gains rate will be significantly lower than the ordinary income rate paid on dividends, making the return rate higher. Would choosing non-dividend-bearing stocks limit (or warp) my portfolio significantly?

Am I paying too much attention to tax implications here?
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