if I bought it 2 weeks ago and I sell before the ex dividend dates will I still get the dividends,.,.payed
If you sell before ex Dividend date you don’t get the dividend. You need to hold the stock at the end of the day before ex div date
As dave says. I’ve edited my earlier response to make it clearer if you were confused by my reply. Apologies. You need to look into a few investing terms, it’ll help you decide which companies to buy and research your own holdings.
thank you its all new to me ,.,.and I am after 12 companies who will pay a correct dividend. one for each month,.,.I buy 2 days before the exdividend. date then sell after this ,.,.is this correct,.,.
then next year if its paying I can look into going global. buying for a higher monthly check
hopefully,.,.
You can try, but the issue you may have is: typically you’d see a share price hike just before the ex-dividend date, because there are many who do this. Sadly if you do not get out at the right time you’ll end up selling the shares at a loss and the dividend will not cover that loss, so overall you could easily end up in a worse position.
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This is normally described as a dividend capture strategy. It’s difficult to get right. The market isn’t as rational as it should be but … if a company pays £30m as a dividend it is now worth £30m less because it no longer has that cash to invest or use otherwise
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The investment strategy described, just doesn’t reliably work. The shares are more likely to be worth less after the Ex-div date than before.
You will loose money following this strategy
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dividends are not always yearly. They are commonly twice a year. Some companies do as many as four a year.
As a long term investor, I don’t use the strategy of buying to get dividends dates, but obviously have benefitted from getting them.
It is worth knowing that on the dividend date, the stock falls by the dividend amount, so you also get the dividend benefit that way. Sometimes the stock falls more than the dividend, as the market realises this benefit is no longer there.
Apologies for bumping an old thread but I thought my question fit here, rather than a new thread.
I’ve been working off a strategy where I research which companies I like are about to have an ex-div date in the next month. I buy them then.
But I recently wondered if I should instead be looking to buy those stocks when they are ‘cheap’ as doing my above strat means I am always buying in the green (as everyone else is doing the same).
Does any one have any thoughts on that?
Hi @nnwhisky
Welcome welcome welcome 
Good choice to reactive a quiet thread, much tidier!
Do you sell the stock after the dividend or keep it?
I would ignore ex-dividend date when deciding when to buy. the stock will drop by the amount of the dividend that day so it will be cheaper, but you don’t get the dividend so it doesn’t make any real difference.
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Thanks for the triple welcome!
I’m keeping.
The current plan is monthly invest my target amount and spread it over the stocks I know will Ex over the next calendar month. But it occurred to me that I could get the stocks cheaper if I bought the ones that just went ex so are less but I wont get the div until next time.
As @Dave pointed out though, I maybe putting brain power into something irrelevant
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thanks Dave!
In my situation then would just buy whatever you’ve researched to be a good price for stock rather than focusing on any ex date?
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Yeah, you could try to time the buy. But often that doesn’t work out. if you want to invest in a stock long term best thing to do is just buy it IMO and ignore dividend dates
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We’re a friendly bunch around here!
XYZ Inc has £100m in cash and the shares are worth £1.00ea. They’re doing well so the management announces a dividend of 10p per share which will cost XYZ Inc £10m.
Nice investors get some cash.
The ex-dividend date comes and goes and now XYZ Inc has now only got £90m in cash and therefore is worth less, in a rational market, investors then take this into account, and the price drops to 90p.
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With the majority of long term investment posts on here being about holding in ETF’s for many years (which I agree with), I see quite a few posts about dividend paying stocks, and using them to enhance your income when you’ve built up a portfolio that’s big enough…
So the question is, should I in theory be diversifying my portfolio to include some high dividend paying stocks? Say I invest in a high dividend paying company, do I have to hope their dividend % is higher than the amount their stock may reduce by in any given year for it to be worthwhile?
My long term goal is a healthy retirement pot, I’ve been quite lucky so far in that every single one of my shares is healthily in the green (I know this will go up and down).
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In my own opinion I think it comes down to personal preference, I’d just like to point out that there are many reasons a company may be paying a high dividend, and how that relates to stock price. It could be, say, a special payout on record earnings or increasing yield because of a decline in the price. It’s helpful to look at other metrics (M&S seems very attractive at the moment for example, but that yield is not really sustainable, its just down to the price decrease. There is a rights issue later this year as well which will put more pressure on the price).
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I think just looking at the div % is not a smart move (especially if its for the long term). Companies that pay out high div usually need a lot of cash flow and a decent balance sheet if you decide to invest in them. We have many examples of high div paying stocks which struggle after a while and reduce their div % or even stop them completely. You would be left with the shares that struggle to keep their value even.
Maybe have a look at ‘div aristocrats’ rather than focusing on high yield div payers. A decent company with a 2% div might make you more money in the long run compared to another company that offers you currently 6 or even 8%.
But please do your own research I am not a specialist here or anything I just share with you what I am doing. A good exercise would be to go back a couple of years and have a look at those high div paying companies and see how they are doing now.
Hope this helps.
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very good points @dk1