Dumb ideas never suffer a bear market on Wall Street. And one of the most durable of all dumb business ideas is the notion that investors have to overhaul their portfolios every time Congress tinkers with the tax laws. Now that the Job and Growth Tax Relief Reconciliation Act of 2003 has reduced the maximum tax rate on dividends from 38.6% to 15%, Wall Street is flogging dividend-paying stocks as if they were the best way to pump up performance since Viagra.
The oddest beneficiary of all this attention is preferred stocks, whose market has been shrinking until recently. Like the...
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