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(Vladislav Kozub) #119

This is correct :slight_smile:

And if you buy the same thing on different days paying different prices, everything will be averaged.

(Thomas James Nicholls) #120

awsome thanks!

(Thomas James Nicholls) #121

Do you earn dividends on an index like ftse 100 or do you have to own shares of a specific company?

And how can you work out how much you will earn in dividends based on the amount of stock you own


Hi :no_good_man:

I’m selling shares soon, my question is: is it worth selling them before an ex dividend date or after, accounting for the dividend income?

Being a complete newbie, I’m assuming a share price will drop after the ex dividend date?

(Vladislav Kozub) #123

You will get your fair proportion of dividends from each of the (in your example) FTSE 100 company.

You can find the past information in the index fund’s Key Information Document (for £ISF, which is iShares’ FTSE 100 fund). On the left side, you can see the “Distributions” section, here are the historical dividends paid. If you would like to, you can see the last few years’ performances monthly and see the average payment, which you could expect not to change too much.

Stocks generally rise before the ex-dividend date and fall by the amount of dividend after the ex-div. It is up to you whether you want to sell, but most likely the market will have precisely calculated the balanced share price. Therefore, even if you are lucky to have a nil transaction commission, your stamp duty will probably keep you in the red overall.

(Ritchie) #124

This is very helpful, thank you!

(Ritchie) #125

I am currently 71,042 in the queue to join the app…! Can’t wait. I am quite new to investing and would like to know whether it is possible to buy shares of the Freetrade platform itself? And if so, are they buyable through the app? Thank you in advance.

When's Freetrade's next crowdfunding round?
(Alex Sherwood) #126

3 posts were merged into an existing topic: When’s Freetrade’s next crowdfunding round?

(Dave Smith) #127

I’ve actually noticed it’s quite common for the drop after ex dividend date to be more than the actual Divi, with commission free trades it may be actually worth dodging the divi by selling and buying back next day. I’ve never done this in the past because commission would wipe out any potential gains, also it’s a bit of a gamble as it might not necessarily work out that way.

(Vladislav Kozub) #128

Haven’t noticed myself but agree that such hassle is not worth the reward (if there is any) :slight_smile:

(Thomas James Nicholls) #129

so where it says the distribution for that months was 0.09 is that the amount paid per share you own?

(Vladislav Kozub) #130

Correct. And as there is about 30 pence paid in the last four quarters, the effective dividend yield is about 4% annually (£0.3/£7). Subject dynamic changes, of course.

(Bruce S) #131

It’s great that the FSCS protects your money in a bank to a limit.

However what happens if a stockbroker such as free trade goes bust. How do you claim your investments, or move them to another stock broker and what are the costs.

Is there a difference in protection between an older broker such as The Share Centre and FreeTrade

Thank you

(Emma) #132

Here is a blog with all the info

(Bruce S) #133

Thanks excellent post! Good to see there is FSCS cover but only to £50K and a whole raft of other safeguards.

(Vladislav Kozub) #134

This generally should not be a problem. Unlike with banks, who hold your cash directly, brokers (including Freetrade) keep their clients’ assets segregated from their own pool of assets. This means that if Freetrade was to liquidate, you would simply transfer your portfolio to another broker.

To give you a comparison, when Lehman Brothers went into liquidation in 2008, all of its clients’ $275,000,000,000 of assets were transferred to other brokers, mostly Barclays who took over Lehman’s investment banking division. Customers did not take a hit. I do not see any reason for any UK broker to have a different approach.

(Vlad) #135

Hello, I just opened an Investment ISA and put my first 150 pounds. I’m not sure how it works though, do I have to just buy shares now and they are tax-free ?

For opening an ISA, does it mean that I am tax free for the first 20k pounds? Sorry for the noob question, I am just getting into this thing now. I am thinking of investing long-term

(Emma) #136

The benefit of an ISA is when you sell your investments or receive dividends, not when you buy. It helps avoid Capital Gains Tax. There’s no real difference in how your account works, just buy as normal (but if you’ve switched from a normal account you need to use the new reference to add funds). This blog will help you

(Vlad) #137

Thanks for answering. Then, is there any reason not to have an ISA? It just seems like a bonus over how you can buy/sell with a normal account.

(Emma) #138

Depends on individual circumstances I guess. For me it’s future proofing my investment and any potential self assessment. Rather set one up than be caught out in years to come