Long Term vs Short Term Investing

Peter L Bernstein: Long term returns are more uncertain than short term despite the conventional wisdom that short term returns are more volatile.
e.g.$100 invested today could become $90 or $110 in 1 year if we say that 1 year time frame is very volatile and could produce returns from -10% to 10% (high std deviation). Now same $100 over a longer 15 year term could produce $207 for 5% returns and $417 for 10% returns. Thus long term, despite having small standard deviation compared to short term, results in a much larger "spread" in total $ returns. (20% spread in ST vs 200% in LT).
Now What?: To bring down the uncertainty over long term, focus on not only "stock price appreciation" but also on "income appreciation (dividends)". Dividends greatly reduce the uncertainty over long term.
e.g. $100 invested in a dividend paying stock in 1925 ,which let's assume had 0 price appreciation, would have produced higher annual returns upto 1965 (!!!!) compared to a high growth no dividend stock. Only after 1965, Price appreciation would take over Income appreciation!
So: morale of the story is, long term returns is a relative term depending on your time horizon. Whatever be the horizon, focusing on stocks that can pay you steadytream of dividends will help reduce the uncertainty invovled.
And: Another key point is, dividend yield will keep going up for you with every passing year.
e.g. if GE pays 5% dividend every year, then $100 invested today become $105 next year. Let's say stock appreciated to $105 at5% growth. Next year GE dividend will be 5% of $105, the then stock price. Your dividend yield is still based off of $100 you invested and hence is 10.25% next year (1.05*$105 = $110.25)! Think about this over a 10 year, 20 year time frame. The dividend yield appreciation combined with moderate price appreciation is a winning combination. One might think this is similar to a compound interest in a bank account. But no. In a bank account your base will remain $100 forever unless you reinvest the interest you receive every year. In our example, we are not reinvesting the $5 dividend we received in year 1. It's the price appreciation that really does the trick which in a bank account would never happen. The underlying asset of $100 will remain $100 if the interest is not reinvested.