Comments on: Buying the Dividend and Dividend Dates

By: Tom

Tom — Sat, 18 Jun 2011 14:09:53 +0000

Surely you could short the stock just before the ex-dividend date and sell immediatly after, thus collecting the dividend without any risk of future price change. Then rinse and repeated with other stocks expecting dividends?

By: Anonymous

Anonymous — Tue, 26 Apr 2011 02:45:10 +0000

Dividends can be a very important part of your portfolio.I agree, but it is also important how to choose a winning stock. Thanks.

By: FLaDave

FLaDave — Tue, 19 Apr 2011 00:09:47 +0000

I guess I re-entered the market at just the right moment, as I grabbed Verizon at $34+(mid-Mar.), thinking dividend, & then have watched it climb to $37+, before the dividend payout !

Don’t know how often one can catch a stock in such a position, but I ain’t complainin’, lol !

By: govenar

govenar — Fri, 05 Feb 2010 09:14:16 +0000

So you’re saying that because you know a lot of people will “buy the dividend”, their buying will make the price go up, and you can take advantage of that by buying before they do?

By: Dan

Dan — Sun, 10 Jan 2010 20:45:04 +0000

What do you think. Focus on a dividend paying stock in an uptrend. After the dividend Date of Record, and after the price stabilization. Then watch for an upturn. Buy the stock, and hold for a peak ,near, but prior to the ex dividend date, sell. Take your short term capital gains. Then repeat. Base your peak and troughs on history and your chosen indicators.
Remember capital gains are one of the perks to making a profit.

By: Wilma

Wilma — Mon, 04 Jan 2010 16:51:58 +0000

Went to that address and Oooo owwwch brain freeze overload. Your right about too much info for now. Will definitely return to peruse that place. Thanks for posting it. =)

By: Steven

Steven — Thu, 31 Dec 2009 06:54:58 +0000

http://beginnersinvest.about.com/od/dividendsdrips1/tp/dividend-investing-guide.htm

Appears to have a wealth of info on dividends, but haven’t read through it yet. Too much stuff, and brain is like, “I’m too lazy now, shutting down now talk to you tomorrow.”

By: Brandon

Brandon — Wed, 30 Dec 2009 14:19:36 +0000

You neglect the short-term loss aspect of “buying the dividend.” When the stock is sold, there is a short-term loss that is applied. If an individual has short-term gain to offset, the net is a wash. Instead, you have converted a short-term capital gain to dividend income, which if properly structured could be advantageous. Additionally, as several posters have noted, book or asset value of a company is not directly related to stock price. Although stocks generally reflect a drop due to a dividend, this drop is usually negated within a few days although short-term volatility introduces some risk.

By: James Woolley

James Woolley — Wed, 30 Dec 2009 11:04:46 +0000

I rarely invest in a company just for it’s dividend but these shares are great for short-term traders because you can make some decent profits buying oversold stocks that are due to pay a dividend in 1 or 2 months time, for instance. They will often increase in price as the dividend day approaches, and often by more than the actual dividend.

By: pmulroy

pmulroy — Wed, 30 Dec 2009 06:58:26 +0000

I have mentioned this recently in another post but I’ll repeat it here:

Stock prices do not drop by the amount of the dividend paid. Stock prices are not determined solely by the net asset value (NAV) of the company. There are many other factors besides how much cash a company has on hand that have a larger impact on the fluctuations of a given stocks price.

“Buying the dividend” refers to mutual funds distributing accumulated dividends. Mutual funds shares are indeed priced by NAV and therefore they will drop by the amount of dividends distributed.

By: LeanLifeCoach

LeanLifeCoach — Wed, 30 Dec 2009 03:54:53 +0000

It seems to me to make this worth your time you would have to bet a large amount on a given stock. ctreit seems to be a seasoned investor but even he/she admits that there are a lot of other restrictions used to pick a candidate.

With HTS it would take a $5,000 investment to reap a meager $200 dividend on 166 shares. How much work would go into screening for the right pick?

It’s always good to learn and understand but I’m not sure an individual should ever be serious about this approach.

Jim, are you playing the dividends? And if so, how much are you willing to risk on a single play?

By: Soccer9040

Soccer9040 — Wed, 30 Dec 2009 02:56:48 +0000

I’ve always wondered about this. Even more so now that its dividend season and all of my ROTH IRA funds are paying out.

By: Jim

Jim — Tue, 29 Dec 2009 19:34:26 +0000

You are correct, I wrote that first paragraph incorrectly, swapping “declare” with … well, whatever verb you could use for the day before the ex-dividend date.

It might have worked out but the logic of it is faulty, the stock falls by the dividend amount so there’s no gain. Has it worked out because the stock has increased after that date?

By: Chris

Chris — Tue, 29 Dec 2009 18:21:02 +0000

Does the market price truly react that quickly to the loss in company value due to dividend payouts?

By: Evan

Evan — Tue, 29 Dec 2009 18:15:52 +0000

Jim,

Maybe you or another investment guru could answer this, but…When do the stocks usually bump up after the dividend? How long does it take?
****
Also, you should mention it is illegal (FINRA) for a financial advisor to try and advise someone to buy the dividend.