Everything you have said is consistent with my understanding re...

Everything you have said is consistent with my understanding re dividends and investment approach, retained profits and management, investment losses.

Conceptually, dividends present an investor with tax liabilities annually (exception: accumulation and pension phases). Most investors will be sitting on high marginal tax rates (45+2+2%), such that dividends are a recurring burden.

Capital gains allow the flexibility of timing and the deferral of taxes (up to an indefinite period in superannuation). This deferral of CGT is in effect being used to accentuate the compounding effect of investment returns. As if this were not already an unfair advantage, an investor is subsequently allowed the choice of when to realise a capital gain (or loss). I believe you have already alluded to this legitimate and sophisticated taxation strategy.

Domestically, dividend yield (S&P/ASX 200) averages 4-5% before franking credits. Across international equities, dividend yield is closer to 2% historically. This provides an indication of how relevant dividend is to equity investors, and how skewed the Australian market is. Given loose monetary policy across most regions and low bond yields, the hunt for yield has now become a global phenomenon ... offshore investors are pouring funds into (and beyond) our banks, TLS and miners!

Good luck in achieving your target growth. I am not so successful (or tolerant) in achieving what amounts to over 7% risk premium, so shall settle for the occasional huge loss!