Another example of dividends being reduced from the price is Lockheed Martin's stock today. As you may have noticed in the video, the stock closed yesterday at $341.69. Yet today the stock closed down (according to the quote I saw a minute ago) -$7.42 today..... So $341.69 - $7.42 gives us a closing price today of $334.27. Yet today LMT closed at $331.67. Which is $2.60 lower than what it should have been. Which we know is because of the dividend.
@nikopaterakis
3 жыл бұрын
Very sad , but I bought more at 332 :D
@doctorhorton
3 жыл бұрын
For some reason I have most of my success buying a dividend stock a week or so after the ex dividend date at a good discount
@dlwatib
3 жыл бұрын
I'm slow. I had to go back and re-watch the video to see what's really going on. On the ex-d day they're quoting the change and %change as from the previous close minus the dividend, but they don't restate the previous close. Got it! Thanks Jimmy for clearing this up.
@xpkareem
3 жыл бұрын
This wording could give the impression that the company is somehow setting the price of the stock lower or the exchange sets the price lower. This tendency for the price to go down after dividend is issued is just the market reacting to an event, just like any other event. It's also a tendency not a hard and fast rule. If you got a free motorcycle when you bought a car you might bid a bit higher than if you just got the car, but not necessarily.
@chadtague6429
3 жыл бұрын
You can trust this guy because he wears US Polo Assn instead of Polo Ralph Lauren. So you know he’s money conscious
@matthewhuston3487
3 жыл бұрын
He better upgrade to that Ralph Lauren . That USPA not where it’s at
@ericferguson1062
3 жыл бұрын
I knew a Chad Tague back in Tennessee 🤔
@chadtague6429
3 жыл бұрын
@@ericferguson1062 lol sup bro? You know there’s only one of me.
@Mel684
3 жыл бұрын
If I’m interested in a stock, I don’t look at the ex-dividend date. I wait for the dip and then buy it. I’d rather have a great buy in price than worry about the ex-dividend date.
@LearntoInvest
3 жыл бұрын
Agreed!!!
@dvdndsWill
3 жыл бұрын
Same here!
@David-xn8bm
3 жыл бұрын
if i buy stocks after ex dividend date will i still be able to receive money from dividends from this stocks in future? ty in advance
@Mel684
3 жыл бұрын
@@David-xn8bm yes indeed
@David-xn8bm
3 жыл бұрын
@@Mel684 ty for reply, so lets say i buy dividend stocks after ex date, the dividend payment is "lost" just for that year right? until next ex dividend date?(there is only 1 ex dividend date every year yes?)
@rhot2012
3 жыл бұрын
I have been buying dividend stocks recently. The ex-dividend date has never affected my decision to buy but this information is very useful to know.
@Scherzkeks123
3 жыл бұрын
I bought yesterday and today (ex div date) because I am in for long term and I simply do not care about one pay date 😊
@Wuschel144
2 жыл бұрын
I have been heavy on stock trading before
@dm09aaj
2 жыл бұрын
@BrodieMcCoy279
2 жыл бұрын
I'm not sure how much longer I could have traded without
@misssophie15
2 жыл бұрын
I'd been doing a lot of intraday trading with a
@westerntree1
2 жыл бұрын
A lot has changed, and that
@harryhamilton6839
2 жыл бұрын
Eric Birger was introduced to me during a seminar in
@firelordsozin3677
3 жыл бұрын
Lockheed Martin looks at Jimmy. Jimmy: *in red head band* “I like the stock”
@bnBottega
3 жыл бұрын
Jimmy, I've been actively trying to understand this "ex-dividend date price difference" factor for months and I still couldn't figure it out. And then, there's Jimmy... This is the kind of stuff that makes me keep recommending this channel to everyone I know. Keep up the amazing work!
@quercusrobur5004
3 жыл бұрын
@@learntoinvest4843 I reported your channel. Stop spamming
@chad7525
3 жыл бұрын
Created a KZitem account just so I could subscribe and start supporting your channel. You consistently present high quality information in an easy to understand manner that allows laymen to make (at least relatively) informed investing decisions. Your channel has personally helped me immensely in my journey to pursue Finance as a career and I very much appreciate what you're doing for this community. You making these videos gives me a glimpse of hope and inspiration for succeeding in this field. Sincerely, thank you for doing what you do. I look forward to your future content and will continue to absorb your wisdoms religiously.
@LearntoInvest
3 жыл бұрын
I really appreciate the kind words and all the support!!! 👍🙂
@trepan4944
3 жыл бұрын
Jimmy and dividend videos go together like PB and J. Great work as always Jimmy.
@squid84202
3 жыл бұрын
This was probably a hassle to think about how to explain, and you made it clear and easy to understand, great job :)
@estrogeneration365
3 жыл бұрын
This explanation may be a bit misleading because it makes it sound like the stock price will go down by exactly the dividend amount on the ex-dividend date, as if the company can somehow directly order the stock price lower which then funds payment of the dividend. Rather, the company pays the dividend to shareholders from its profits. The stock price typically goes lower on and immediately following the ex-dividend date because new buyers judge it to have less value at that point since they don't get the benefit of the dividend. But the lower price doesn't fund the dividend nor necessarily match the exact amount of the dividend.
@arsalan3528
3 жыл бұрын
Wow! This is the best explanation I have seen on the topic. Especially the part about the dividend being removed from the quoted price. I read a few other articles which all failed to mention it. As always your content is top notch! Happy weekend.
@skd
2 ай бұрын
It depends...you buy the stock after the ex-dividend date to avoid the tax (and pay it later). But who know how much the tax will be later? Maybe it will be double, or triple. Or maybe half the price. You can't really tell for sure. What I usually do is buy 1 month before the ex-dividend date and sell right before. There are a lot of people that bring volume in the last week before the ex-date and I usually get a good profit right before it drops the dividend amount. You do this once a month and you can get anywhere between 1% and 3% on a stock. That's a great return per month.
@Kaloyan.Dimitrov
3 жыл бұрын
As always great and valuable content. Thanks, Jimmy! I have 2% of my portfolio in LMT, the US government will keep putting millions in the military which means that LMT will have substantial bussiness over the next decades.
@shrimatkapoor2200
3 жыл бұрын
Ah I think the market fluctuation hiding the dividend payment was confusing me the last time you mentioned this. Thanks!
@michaell2444
3 жыл бұрын
Hi Jimmy! If you’re smaller investor and start a portfolio from scratch, do you think it’s a good strategy to focus on dividend stocks (assuming they can be bought at a discount) sacrificing capital appreciation until you reach a relatively large yearly dividend and then use it to go after “growth” stocks? Note that I’m not suggesting to keep the dividends in cash until the desired yearly amount is reached, they should be reinvested in the currently owned stocks.
@pasiojala3227
3 жыл бұрын
For me owning dividend stocks is another source of income and allows to take the dividends and diversify to other stocks. Mostly other dividend-paying companies though, I'm approaching my stop-working-target age.
@georgestanko2523
3 жыл бұрын
@@pasiojala3227 same strategy here. i think its fun to research and branch out into other companies.
@MrLalaeu
3 жыл бұрын
By far, the best investing channel on KZitem!
@-_MR666_-
3 жыл бұрын
Together with Sven Carlin!
@e.manuel
3 жыл бұрын
Wow! Please keep bringing info nobody else is talking about. This is real investing class 101!! Bravo 👏
@AngeloBRossi
3 жыл бұрын
This is clearly better produced than the previous videos! This looks great! My only comment is: when you stand stright there is some shadow on your forehead I imagine is just quick adjustment ion lighting
@LearntoInvest
3 жыл бұрын
Good call, I'll see if I can fix that
@pasiojala3227
3 жыл бұрын
In Finland dividends are taxed more favorably (25.5%) than wins from selling (30%). As a result the stock price might drop more than the dividend payment, but usually the stock price also recovers in a fairly short time. On the other hand, the stock price has probably had a slight boost before the ex-dividend date. So, both buying a few weeks before and selling before the ex-dividend date, or buying after and selling a few weeks later are both viable alternatives to the "tax optimization" strategy. If you only knew how that specific stock behaves this time...
@kevangrant6223
3 жыл бұрын
Hi Jimmy! Great video! I've never come across these concepts anywhere else, love learning new things. Keep up the good work!
@jsunproter1940
Жыл бұрын
I've been using the div capture Strategy for almost a decade. There are other factors than the ones in the video. This is a good introductory video
@mariobotana7966
3 жыл бұрын
I was aware of the price difference but now you provided the evidence behind it. Thanks Jimmy!
@Mr.Turano
3 жыл бұрын
Dude, thank you so much for explaining this. I have always wondered if I could benefit from both of those strategies. I’m glad to know that although you shouldnt short the stock, you can sell calls, which allow you to keep the stock to get the dividend, and you could get premium as long as the stock doesn’t explode by then.
@LearntoInvest
3 жыл бұрын
Great point with options. That should work. The only thing I would be careful of is I believe that works for "regular" dividends, but if it's a special dividend, I believe options are also adjusted. But I'm not 100% sure on that rule. But there something about special dividends that throws off options. Just to be aware of 🙂👍
@mithrixx
2 жыл бұрын
This guy is a genius... No one ever explained it like this. I actually watched this video a couple of times to make sure I heard right. It totally makes sense now
@jespermadsen8528
3 жыл бұрын
Hi Jimmy. Well explained easy to understand video. It looks a bit like the market is heading down a the moment. A way of trying to snap up shares like LMT for a lover price is to sell a put option on the ex-dividend day. In this case you might get the shares when the option expires and if you don't then you will at least have the profit from the sale of the option. Thanks again, I love your videos. :)
@daveclark6324
3 жыл бұрын
Very detailed information as always - thanks so much! I usually do not own dividend stocks, but plan to in the near future. I could never remember if I had to own on ex-div date or before - thanks! 👍😊
@SteveMoore1969
3 жыл бұрын
Thanks for this video I've always wanted to ask this question....
@panda-bean
3 жыл бұрын
Hi Jimmy, just wanna say thanks for the great videos! Been trying to get started investing and your channel really helped me A TON learning.
@Ainsley0911
3 жыл бұрын
Super easy to understand the way you lay it out. Thank you.
@kaneanthony7724
3 жыл бұрын
Thanks for the answer 👍 bought the stock today. Appreciate your videos. Very informative and objective. Subscribed
@David.Marquez
3 жыл бұрын
Thank you Jimmy! I really look forward to a video on dividends every couple weeks or months, I ALWAYS learn something new from them.
@sabriath
3 жыл бұрын
If you buy 100 shares, then you could technically sell the 337.5C and collect around the amount in dividend you may have missed out on...and if the stock explodes, you still make a profit. If you buy less, you can sell a spread to cover the base to the top....for example, buying 45 shares and selling the 340/347.5C spread will get you $110, 45 shares at 2.60 would have been $117, which is extremely close, and if the stock goes up to 347.5 (max loss) from the current price of 330.80, then you would "lose" 750 for the spread, but profit 751.50 from the increase in the 45 shares of stock, so it becomes almost a wash at any level from 340 and up. Or you can do 15 shares and sell the 345/347.5C spread for $40. If it has options, then you have the ability to make money....you just need to learn math. It's quite funny to me when I hear people sarcastically say something like "I am so glad I learned algebra in school, it totally helps me with my cashier job"...well....I make over 300% a year knowing and using calculus on the stock market. Math is important kids, don't miss out of the good classes in school!
@oskonem8323
3 жыл бұрын
nicely put Jimmy! I made some research about that topic few months ago and your video is by far better! Great job!
@awalton9024
3 жыл бұрын
There were questions in the comments about how the dividend payment gets reflected in the stock price if trading activity is what sets the stock price. The (over simplified) answer is, the exchange opens the stock for trading on the ex-date minus the dividend. Ex. XYZ closes Jan 1 at $100, the ex-date is Jan 2 and the div. is $1. All things being equal XYZ will open for trading on Jan. 2 at $99.
@walterlol
3 жыл бұрын
Can someone please correct me or explain it to me: I thought dividends were paid to the shareholder's account directly from the company's account/cashflow. Now Jimmy is saying that they basically remove the dividend amount from the stock price and deposit it into your account. This would simply be a transfer of value from the stock price to cash into your account. I don't see how the shareholder is gaining any value from the dividends? What am I missing?
@blackmon3
3 жыл бұрын
I have this exact same question myself. If the money is coming from the company, and no shares and traded as a result, why is this affecting the share price?
@MichaelH3948
3 жыл бұрын
@@blackmon3 Share price is a reflection of market cap. Market cap is a reflection of the value of the company. The value of the company is determined in large by the company's equity. Paying out large amounts of money as a dividend reduces the assets on the company's balance sheet, reducing the equity.
@blackmon3
3 жыл бұрын
@MemeMaster420 Market cap, as I understand it, is a reflection of what 'the market' (people willing to buy/sell the stock) think the company is worth. This is how companies like Tesla and Game Stop can have crazy high market caps that are completely divorced from the realities of the underlying business. There are people in the market that are willing to pay that price, so the price goes up to reflect the increased demand. Assuming no one wanted to buy/sell the stock on the ex-date, and the actual money to pay the dividend came from the underlying business, what am I missing about the process of a dividend payment that makes it affect the share price (and by extension, market cap)?
@walterlol
3 жыл бұрын
@@MichaelH3948 This makes no sense to me because the price of the share is going down the exact same amount as the dividend. To me it almost looks like market manipulation.
@LearntoInvest
3 жыл бұрын
Hey guys, so yes the dividend gets paid by the company. But then, the stock exchanges "adjust" the price to reflect the cash payment to shareholders. Another example is lockheed martin's stock today. As you may have noticed in the video, the stock closed yesterday at $341.69. Yet today the stock closed down (according to the quote I saw a minute ago) -$7.42..... So 341.69 - 7.42 gives us a closing price today of 334.27. Yet today LMT closed at 331.67. Which is $2.60 lower than what it should have been. Which we know is because of the dividend. SOO, is it manipulation? I'm not sure. When I first learned about how dividends truely work, it seemed crazy to me, but since then I just gradually just accepted it as a fact of how it works. Either way, I think more people should understand how dividends work - hence the video. Sorry I don't have more answers 🥺
@regulareuropeaninvestor2154
3 жыл бұрын
I bought some LMT based on your previous vid, I did on Friday, as I want to postpone my taxes as you mentioned in the end :)
@HitsFromThePast
3 жыл бұрын
That don't make sense. You will be tax at the end of the year. If you buy before the exdate, chances are you will still be in the same tax bracket. Plus, If you DRIP the stock then you will miss out reinvesting your dividend payment. I would buy before and on the exdate to lower my cost.
@regulareuropeaninvestor2154
3 жыл бұрын
@@HitsFromThePast I guess you are right, but I am from Europe (So tax system is a bit different in my case :) )
@hansschotterradler3772
3 жыл бұрын
Perhaps the best timing for buying a dividend stock is just before a dividend rise is declared? For example, VZ declared a dividend raise on 9/3/20. It could make sense to buy VZ in August 2021 betting on another increase to be declared in September 2021. You may get the most bang for the buck unless this kind of stuff is already baked into the share price.
@ipwnatcallofduty99
3 жыл бұрын
Jimmy, a video idea for you. How to value a company with no FCF!
@zainjav
3 жыл бұрын
I’d try a PE valuation
@jerryfacts9749
3 жыл бұрын
As for myself, I am not critical in relation to the dividend date because I normally keep these dividend stocks for a very long time. I have many that I owned for decades. I simply keep getting the dividends and buy more shares. Over time these stocks normally move up because of inflation in combination with corporate growth and so-on. Normally dividend stocks are bought to have some income from them. With quality companies that have decent long term performance, and are paying a dividend these are ideal for income. When retired, dependable quality dividend stocks are important for income. If they do a bit of a down run or some type of correction, this is not critical as long as these stocks (companies) keep paying out their dividend.
@Stcomdoc
3 жыл бұрын
Good point. . in the long run, dividends could be seen convenient way of selling small amounts of stock, done automatically.
@Tristen501
3 жыл бұрын
The value in this video is ridiculous! I've wanted to know this information for years. I figured buying b4 the ex-dividend date strategy wouldn't work, but I never knew why. I did know about the shorts having to pay the dividend though, which I think is funny - not sure why but I do literally laugh when I think about it. XD
@lslurpeek
3 жыл бұрын
Good info like always. Can you consider doing videos on selling options? It's making me a lot more than dividends have so far.
@Dimitris_1987
3 жыл бұрын
I own very few stocks. LMT is one of them, I 'm very long on them and very confident too. This company will raise its dividend 8-12% per year for many years to come. Americans do not tend to understand the tensions around the world, but as a Greek I will tell you that at least in the eastern Mediteranean Sea the situation changes rapidly and the tensions are arising. This happens in other areas too and the conflict between US & China is also growing. Taking into account the recent acquisition and the space industry that is booming, that's a no brainer. Dividend above 3% with a 40% payout ratio, what are you waiting for?
@christophergantt1635
3 жыл бұрын
Well Said
@AwfulEye
3 жыл бұрын
had no idea they were doing it this month, i bought in on the 24th, didnt do a full share only fractional (put $100 on it)
@RaphaDD
3 жыл бұрын
Hello Jimmy, I have a (possibly stupid) question for you : Let's take your "simplified LMT" example (100$/share with a 2.6$ dividend) which implies a 2.6% dividend yield. As a long term investor, wouldn't it be more interesting to wait for (or after) the ex-dividend date to buy the stock, so that we can have a 2.6$ dividend for a 97.4$ share (implying a 2.67% dividend yield instead of 2.6%) or am I missing something ? I know it doesn't represent a huge difference in this example where we have a 2.6% dividend yield, but for companies with a 4% dividend yield, would that make sense ? Thanks a lot for your answer and for your work on this channel, it's awesome !
@Everest314
3 жыл бұрын
Even if you buy right before the ex-date, you still pay 97.4$ per share, since you get the 2.60$ back on the next day. As Jimmy says, the only real difference is taxation. So if you have to tax the dividend, it is better to buy ex-dividend. Otherwise, it really doesn't matter. Besides, any benefit you could gain in such ways would immediately get arbitraged away by professional traders.
@Josh-zq7pq
3 жыл бұрын
Wow something I didn’t know, nice work Jimmy!
@stancoleshill8925
3 жыл бұрын
Depends what you want. I prefer getting the dividend as it is more of a guarantee that you will be paid as opposed to hoping that the price will go up, then you must sell it to make the "gain" which costs money.
@tomsettles6873
3 жыл бұрын
Jimmy - thanks for all your videos. Question - In a taxable account, what would you substitute for corporate bonds as a hedge against stock crash? Maybe tax exempt muni etfs or long term treasuries?
@Matt-wf7ry
3 жыл бұрын
Hopefully everybody follows your advice - I have made hundreds of trades right before the ex-dividend date and sold right after and made great profits from not only the selling of the stock but also by swooping up the free dividend. Dividends are not, and I repeat, NOT coming out of your stock and just being transferred to your account. There can be some wavering of the price of the stock and sometimes can succinctly line up with the amount the dividend was if the general market feels the value of the stock has fallen that much. Dividends are quite literally coming straight from the company to your broker and then to your account. At least every company I make trades with operate in this fashion, it would be the shadiest deal ever to have a company essentially take money from my own stock and then send it back to me with a "You are welcome" note on it. I would avoid those companies at all costs.
@rockinviper09
3 жыл бұрын
Like the new icon and the new lighting, thanks for the videos.
@donnav7849
3 жыл бұрын
Another great video! The best man for explaining things to investors there is
@joaquinvelasquez6232
3 жыл бұрын
Hi Jimmy, thanks for the hard work . I was curious about this specific topic.
@leagueplays2100
3 жыл бұрын
Well surely buying it on the ex divi date is the best then because it'll drop in price
@PM_2066
3 жыл бұрын
buy a few days before the ex-div date, sell your shares before the market closes on the day before the ex-div date at a time when there are many buyers looking to jump in for the dividend.
@andrebastos3362
3 жыл бұрын
Hey Jimmy, could you do a CVS Health stock analysis please? Seems undervalued to me. Let me know what you think! Thanks in advance.
@premakolia
3 жыл бұрын
that's a lot for explaining the math behind the charts!
@Afkiller19
3 жыл бұрын
Hey Jimmy, not sure how often you check all these comments but It's worth a shot. Would you make a video on analysis video on CLX, they've greatly benefited during the pandemic and I believe they are at a bargain price atm. Keep posting great content!
@FalconSmart
3 жыл бұрын
Best video to explain the dividend!
@michelUSAvideos
3 жыл бұрын
Perfectly clear explanation. Thank you very much!
@red149
3 жыл бұрын
Hi Jimmy, is it possible for you to post the excel sheet ( or the pdf) when you do a DCF on a stock ? thanks
@CRMN33
3 жыл бұрын
If dividends need to follow the 121 day rule to become qualified, is it possible to do this on monthly dividends since you only have a 60 day window?
@yanivb82
3 жыл бұрын
what do you think about T as a dividend investment ?
@gianlucacrosatti4226
3 жыл бұрын
Great investment
@glove7786
3 жыл бұрын
Aren't they Losing some business?
@georgestanko2523
3 жыл бұрын
6.7% yeild as of 4-6-21. Thats very solid. Dont put all your eggs in one basket though. I actually own some T myself.
@so-oh5sq
3 жыл бұрын
I love your content. Good explanations and right to the point.
@dustindodge5974
3 жыл бұрын
Great video, would've been nice watching this video years ago before I learned from trial & error and reading
@jeremyboyd1197
3 жыл бұрын
There are tax implications of buying prior to the ex-div as well (especially if the payment date is < 60 days or you sell shortly after). You must hold a share for 60 days for it's payment to be considered a qualified dividend. Because of the TCJA, income from a qualified dividend is untaxed for an AGI < $40k for single and $80k for married, which is basically a 20-30% boost in the effective return of the dividend for most people, and if you are living on ONLY dividends, you can be federal income tax free.
@quercusrobur5004
3 жыл бұрын
Thanks Jimmy. Any chance you are also doing an analysis on the other attractively valued defense companies like NOC and LHX?
@tudor.abrudan1
3 жыл бұрын
this is exactly what I wanted to apply on ABBVIE at the last ex dividend date. It was a bad choise. The price grew in the last week more than the dividend price, after x date, for a short period it decreasted, but, it boomed to more than 115 .... In this (exception) it would have been bether to buy before ex date. Would have got dividends + price groght .. :) Exception.
@patrickf2671
3 жыл бұрын
Thank you for your time and effort .
@corydehning5671
3 жыл бұрын
I buy before ex date for capture once it drops then buy as much as I feel comfortable with to increase margin and then dump it all once I see a comfortable return. Then move on to the next.
@leninmoreno4020
3 жыл бұрын
Very educational, thank you
@jamo3976
3 жыл бұрын
i didn't know that it was automatically accounted for in the price! but that still doesn't negate the buy before the ex-dividend date strat completely does it? that's just accounting
@wtfbro9895
3 жыл бұрын
Thanks for very useful information! Keep up the good job!
@georgestanko2523
3 жыл бұрын
Much respect for this video, but i think a more useful video as it relates to dividend stocks would be to explain yield. And why, in retrospect, April 2020 was such a great time to buy into dividend paying stocks. Regardless of the stock price going up or down, it was a great time to lock in some crazy high yields. A lot of people dont understand what yield means.
@geraldsahd3413
3 жыл бұрын
Thanks Jimmy for answering my question!
@nuwind2
3 жыл бұрын
My favorite dividend stock is REML pays monthly with a higher quarterly been holding since last march only .01-.02 monthly but last quarterly was .19 at 6 bucks a share so a pretty sweet dividend for a small price stock currently. Before the pandemic it was paying .07-.09 monthly and quarterly was 1.20-1.33 so I’m hoping it rebounds to those prices at currently holding 670 shares and going to be buying more
@JotaCero10
3 жыл бұрын
Jimmy you are the man! Thanks for sharing the knowledge
@millionaireincorporated6280
3 жыл бұрын
I heard another potential strategy surrounding stock and dividends is to buy them after the dividend announcement, especially if its a good one because the stock price gets run up to factor in the dividend price into the share price. I haven't done this myself nor have I gone into checking the validity just something I've heard.
@LearntoInvest
3 жыл бұрын
Interesting! it's a logical strategy, I'll dig into this a bit and see if it could be proven
@ChadCarlisle
3 жыл бұрын
It sometimes takes a few days or even weeks but the price usually returns to its pre-Ex-dividend date price. I know people who do the dividend capture and simply wait until the price returns and then they sell and do it again. They make several trades a month like this and are making money. Buying the stock after the price dip and riding it back up seems less risky to me.
@awalton9024
3 жыл бұрын
Another huge problem with the dividend capture "strategy" is that dividends on stocks held less than sixty days are not considered Qualified and will be taxed at the same rate as income.
@DS-ii9eh
3 жыл бұрын
Or you could avoid the tax on dividend income altogether by buying after the dividend is removed from the price. Taxes currently only apply to income and not to the cash leftover in your cash account. Plus it would be available to reinvest sooner than waiting for the dividend to arrive.
@Ravencroft81
2 жыл бұрын
Always thought you had to hold till end of day of the record date and found it curious a shareprice fell by about the dividend on exdividend date.
@tf2375
3 жыл бұрын
So as far as reinvesting dividends to purchase other tickers, rather than DRIP back into same ticker, I wonder if purchasing monthly dividend payers, i.e. OXLC, PSEC, HRZN, GAIN MDIV ect., would accomplish the goal in a more expedient time frame?
@willchatman8935
3 жыл бұрын
He is a very knowledgeable and highly intelligent person. Hands down. Great work
@wastename0
3 жыл бұрын
Thanks, Jimbo.
@karlatkins5280
3 жыл бұрын
Great advise thanks
@Christophe.C
3 жыл бұрын
Just when you said to short the stock on the ex-dividend date, I was thinking the same thing..
@griffinj1204
3 жыл бұрын
Thanks for the video!
@georgioszaphiropoulos5378
2 жыл бұрын
Great video! The problem on the short strategy, still occurs when trading leveraged CFDs?
@ranafarooq8185
3 жыл бұрын
You are awesome, thank you Jimmy
@MsFisherprice
3 жыл бұрын
Thank you I love your videos
@manfredadams3252
3 жыл бұрын
If you buy on the ex-dividend date you purchase it for the lower price, however you did not receive the return of cap. The two scenarios are not equivalent.
@LearntoInvest
3 жыл бұрын
True! Plus there are taxes to consider
@manfredadams3252
3 жыл бұрын
@@LearntoInvest Yes, but the tax event is due to having made more money. Not necessarily a bad thing.
@davebirkbeck9348
3 жыл бұрын
Depends on the Market if its rising the stock does not necessarily go down.
@SergiMedina
3 жыл бұрын
Very interesting, I didn't know the price goes down literally the same amount as the dividend paid! Does this happens always? What about stocks with very high dividend yield? Why is the price of the shares affected if the company paid with its money?
@LearntoInvest
3 жыл бұрын
Yes this happens whenever a dividend is paid. Even with high dividend stocks or ETFs. And I believe the theory is... If I am worth $1000 and I give you $100, by definition I am now worth $900. so in theory, the transfer of cash from the company to the investor will reduce the stock price by the exact dividend amount. I think the tricky part, as I tried to point out in the video, is that the reduction in the price doesn't appear in the daily move of the stock price. So unless we're paying close attention, many Investors will never see what really happened to the stock price.
@SergiMedina
3 жыл бұрын
@@LearntoInvest Thank you for the reply and the always interesting and useful content! I still don't get why it's reflected in the stock price if price isn't the same as value, I mean, if a company pays with its money, I just don't see why the stock price should be affected, as it's a product of traders and investors while buying and selling, not actual current value...
@awalton9024
3 жыл бұрын
@@SergiMedina It's because the company itself is now worth less by the amount of the dividend. Think of it this way: I offer to sell you my company, the only asset is a $100 bank account. You agree to pay me the fair economic/market value. Then I pay a dividend of one dollar to somebody, the fair value you would give me is now $99. Part 2: But wait there's more! The company you bought for $99 is an exchange traded company. You awake to find Maria Bartiromo is breathlessly reporting on CNBC that $99 Bank Account Inc. has been sold to a mystery buyer. Could it be Jeff Bezos? The traders bid the company up to over $800 by noon. Then it becomes known that the company was bought; not by Bezos but by Sergi Medina. The founder of Google?! BUY! No, that's Sergey Brin. The guy who asked a good question on KZitem is the buyer. SEELLL!!! By closing the panicked traders have bid the company down to $83. All the while It's still worth $99. But this is Wall St. The first part is the reality the second part is the insanity of Wall St. The second part does not negate the first part. What people who try Dividend Capture don't realize, is that they are not capitalizing on the reality, they are gambling on the insanity.
@SergiMedina
3 жыл бұрын
@@awalton9024 Thank you for the (long) explanation, A Walton. Alas, I still don't understand why the dividend payment is reflected in the stock price if the stock price frequently has nothing to do with the “real” or “actual” value of the company... I mean the market cap doesn't have to necessarily be what the company is really worth...
@awalton9024
3 жыл бұрын
@@SergiMedina Sorry I didn't help, hope I was at least entertaining. Mainly it's important just to know that if you are a long term investor then don't worry about it, collect your dividends. The economics of the firm will be lost in the trading noise. But for people who believe they are getting a "free lunch" by buying before the Ex-div. date and selling after the record date, they aren't. They are gambling on what the market will do during that three day period.
@PaintrainX
3 жыл бұрын
So disappointed. My (European) brokers don't offer Lockheed stock :-(
@patrickac2924
3 жыл бұрын
Change broker! Use DEGIRO 😉 EDIT: I checked and they don’t...what the hell!
@PaintrainX
3 жыл бұрын
@@patrickac2924 yeah, I know. Maybe because Lockheed is a semi-government corporation they don't want foreign shareholders.
@johannesbakker3204
3 жыл бұрын
Interactive Brokers (Lynx in the Netherlands) offers LMT
@roberttaylor3594
3 жыл бұрын
I tried this with Canadian banks last quarter, rotating through them to capture the dividends, buying a week before ex dividend and selling after the price recovered, and deciding if it worked or not is... difficult. Canadian bank stocks bought on ex dividend had better returns in 3 months than if bought before ex dividend, or seemed to in the examples I looked at... so buying on ex dividend is the sale price for the next quarters dividend.
@user-qt6ju3qm3j
3 жыл бұрын
like in hsa and Roth IRA if I have low income.And we all know we don't need to pay tax. My question : Can I get the full dividend if I don't keep the stock 61 days?
@DonLee1980
3 жыл бұрын
As a foreign investor, my dividend gets a 30% tax charge. So the larger the dividend a stock gives, the worst it is for me. Idealy, I should sell the stock the day before the ex date, and buy it back the day afterwards. But that's too much hassle, so I just avoid buying dividend stocks, and stick with growth stocks and tech stocks. Ideally, BRK.b would be great because they own a lot of dividend stocks, they "collect" the dividend for me and that money is reflective in their stock price, but I don't get penalized needing to pay any dividend tax to the US government.
@mrchess24
3 жыл бұрын
I like YOUR PREVIOUS LOGO MORE SWITCH BAKC PLZ
@falsificationism
2 жыл бұрын
Since the dividend payout happens on the day of the expected share value decline, do people with DRIPs benefit by systematically reinvesting their shares when shares are low?
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