Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Dividend investing for retirement -- Ignore unavailable to you. Want to Upgrade?

To: Investor2 who wrote (26215)	1/1/2017 6:03:29 PM
From: Mannie	Respond to of 34328

Can this approach be profitable? maybe yes....maybe no.. Remember that if you sell right after the ex-dividend date, you will be selling with the amount of the dividend extracted from the share price. You'll get the dividend down the road, that gets you back to even. Of course there are the normal market fluctuates in play that are impossible to predict.

To: Investor2 who wrote (26215)	1/1/2017 6:18:47 PM
From: Rarebird	Respond to of 34328

Dividends are great if you got a good stable company on your hands. The ideal scenario is to hold the stock and not trade it short term. I think small cap value will return more in 2017 than dividend paying stocks, but there will be exceptions. Ultimately, it will be a stock pickers market.

To: Investor2 who wrote (26215)	1/1/2017 6:56:44 PM
From: Elroy	1 Recommendation Recommended By rnsmth Read Replies (1) \| Respond to of 34328

Consider this scenario concerning a series of stocks with sequential ex-dividend dates: Buy Stock A before the ex-dividend date and then sell it shortly after the ex-dividend date. Then invest the proceeds into buying Stock B before its ex-dividend date and again sell it after its ex-dividend date. Move on to Stock C... Can this approach generate income? All else being equal the stock share price should decline by exactly the amount of the dividend on the ex-dividend date. Of couse it goes up sometimes and goes down on other days, but on average, a stock which goes ex-dividend on a 20 cents dividend is going to decline by 20 cents on that ex-dividend date. So your approach would generate 20 cents of dividend income (probably taxable income) and generate generate short term capital gains and losses (due to all the share trading) and lots of commissions (again due to all the trading). It sounds like a really bad plan. ---- If you want income, I would just buy CEFL and BDCL (2x leveraged basket of closed end funds and basket of BDCs) and sit on them for years. They both pay 15% to 20% annually, hard to get more than that from a dividend stock. The share price of the two moves around a lot, but they have paid really well in terms of income in the years that I've owned them.

To: Investor2 who wrote (26215)	1/1/2017 7:23:05 PM
From: Paul Senior	1 Recommendation Recommended By research1234 Read Replies (1) \| Respond to of 34328

I2, I'm surprised at you. You've got many years in the market, and you should know better (well, imo.) It seems like every beginning investor in the world comes up with this great idea to make money: buy just before ex-dividend, capture the dividend, then sell, then repeat. There is such a thing as a free lunch, and this is it! Well, it doesn't work. The markets are too smart for that. (Ok, there's going to be somebody here who posts he does it successfully, but really, for 99% of people, it either is not profitable or not worth the effort/risk.) There's a fund that specializes in it - I don't recall them being very successful though. jmo

To: Investor2 who wrote (26215)	1/2/2017 6:16:15 PM
From: TigerPaw	Read Replies (1) \| Respond to of 34328

There are generally commissions to be paid on both purchase and sales. The commission becomes less of an issue if the shares are held for a long time (fewer total buys and sells). The commission is also a smaller part of the transaction if you buy/sell a larger number of shares and you can get a flat-rate commission (i.e. same cost regardless of the number of shares or their value). The rapid buy and sell approach is more likely to generate income for the brokerage house than the shareholder.

To: Investor2 who wrote (26215)	1/3/2017 1:49:03 PM
From: ralfph	1 Recommendation Recommended By berniel Respond to of 34328

Generally the buy sell scheme does not work. there is enough of a fluctuation in price that the profit from the dividend will not cover the loss on the fluctuation in stock price. I followed about 40 blue chips several years back to see if i could find one with swing trading just to grab the divvie - honestly none of them indicated trading in an out would be worth the time. Watching the PE ratios and buying into an unloved company with a low PE and a decent divvie does work wonders - just as long as said company is not in a sector that is about to become obsolete. Fees - not only did I pay 300 bucks for a transaction I had to a pay a yearly "maintenance fee"