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And now for something completely different, courtesy the strategists at RBC Dominion Securities. According to neuroscience, a MRI scan of the brain's reaction to seeing red on the Bloomberg screen is about the same as being poked by a needle. True contrarians, the scientists argue, exhibit a completely different neuro-chemical pattern to mere portals. Their brain waves show a sense of calm, not unlike that of a sociopath, when red hits the screen. RBC chief strategist Myles Zyblock has found a way to translate this finding for investors. Noting that low price-earnings stocks tend to outperform over time, he writes that neuroscience argues that buying low-valued stocks "means, by definition, going against the grain. It is a behaviour we are hardwired against doing. In effect, buying cheap stocks is buying something that is out of favour, not unlike doing something that hurts." Same holds for dividend paying companies, which not only exhibit superior earnings growth profiles but their stocks outperform over time, compared with non-payers. Bottom Line: "a portfolio approach that emphasizes low valuations and dividends is a strategy for almost all occasions. Why? Because it hurts, so say neuroscientists. And as long as it is an uncomfortable investment strategy for most investors, it will continue to work."

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