self control-portfolio concentration curricum 2 page 106 behavior finance Q12

CFA Level III
#1

in Q12, self control is usually spending much, and they are looking at high dividend income rather than capital appreciation, how can it lead asset imbalance problem? since return for dividend is less than capital appreciation in long term, why answer says they are looking for higher return and risk?

by the way, can i say over-confidence may have asset concentration on sector and stocks and market netural may have asset concentration problem, self control also have asset concentration on sector and stocks?

#2

any idea?

#3

It seemed ok to me. You tend to generate higher short term returns with high yield stocks , and they are suggesting it is because you need the current income to support the extravagant lifestyle . But long term this creates the asset imbalance problem because the capital gain performance would be subpar and your assets will erode over time.