Question about dividends

Only recently started investing and want to go in easy so have bought a few well know shares that offer a decent about of dividends.

But wanted to ask for example Tesco’s has its ex-dividends date on the 20th of may and payment date on 2 July if I were to sell the shares a couple of days before the payment date would I still receive dividends as I know once’s they are paid the price of the share drops by the same about of dividends paid

Thanks

Yes you’d still receive it. The drop is on the ex date, not the pay date.

1 Like

Ok thank you for the clarification

I’m guessing it would make sense to sell the shares before the payment date and then re but if need me?

Not really. That makes no financial sense either.

Selling before a dividend payment date, unless you no longer wanted the shares or they hit such a sweet price, that you believe a crash to be imminent, is a strange practice.

A lot of people sell immediately upon reaching the ex-dividend date, it too has been shown to be a flawed system.

When you sell, the dividends payment does generally cause a relative share price reaction in a downward direction & you will absorb not only that dip but you will further lose on the spread between a current purchase price & its future sale price - that being anything from a fraction of a pence to several pence per share.

Likewise, to buy back in you instantly buy at a premium to the ‘sale price’. Not only that but stamp duty & other charges that you once had settled (on the previous holding), are applied again.

People need to beware all these strange practices. On occasion, the stars may align & you end up better off but that is few & far between.

The correct course of action is to buy steady dividend paying shares for the long term & retain them.

Dividend investing needn’t be complicated as many make it.

In fact, I believe Freetrade, T212 etc should apply a freeze on dividend share sales for 48hrs from an ex-date.

It must be a commission free phenomena because nobody in their right mind would do this hokey-cokey routine if they were subject to a commission charge on both sales & purchases.

Really bizarre tactics like these should be researched & understood.

There’s no way a financial industry as developed as the stock market, can be beaten by such a rudimentary tactics. They close any obvious gaps & rig fail-safes into just about any conceivable point of manipulation.

3 Likes