Holding for stock Dividends is a near total waste of space

[never2old]

This imo would be the strategy to employ.
Stocks usually rally in anticipation of a dividend and more than 1-2%, sell on open one day before ex div date.

requires a bit of research to find stocks that lull then pop prior to ex dividend as well as how much they drop ex-dividend

MO might work, pays approx $0.84/quarter dividend that also follows the lull/pop window a few weeks before ex dividend. See the chart for the movement around the last 2 dividends.

https://finance.yahoo.com/quote/MO/...5IiwidGltZVVuaXQiOm51bGwsInNldFNwYW4iOnt9fV19

as an example based on past behavior this would be a buy 14 days before ex-dividend then sell 1-2 days before ex dividend that should get 3% -5%+ for a less than 30 day trade

 

[Apologetik]

I won't comment on individual stocks as I do not trade them any longer...

I do use CEFs and ETFs as collateral on my trading portfolio and look for monthly div payers. I look at the support on the chart and try to buy low (as we all do). Of the trade goes in my favor immediately I will set the stop-loss for break even. If I get capital appreciation equal to 12 months of divs I move the stop-loss (take profit) to there. If trade goes against me I cut losses at 5% down (normally earn a few months of divs on this first) and take the haircut. This seems to work well especially for high yield plays (think CLOs).

Many foreign companies are once or twice a year divs. Many of the stodgy EU/Japanese companies are cyclical (like US companies when I first started trading). I do well looking to buy near bottom of cycle and sell at top (sometimes you get the div, sometimes not). The hardest part is finding the research on those companies to make certain the drop (or increase) does not represent a fundamental change in the underlying.

 

[Cabin111]

Here are my thoughts. Most years I DO NOT PAY TAXES!!! My wife and I have so much medical/dental that we pay 0 in taxes. We also have Roth IRAs...Taxes already paid. So for us, taxes do not come into play. I am 65, my wife, 64...I've had two heart attacks. Think widow and orphan stocks for us.

So I can get 00.1% from a bank CD..It is a given at this time. Inflation is less that 2% as we speak.

Can we talk ADM...Pays their dividend like clockwork. Has paid it for like a gazillion years!! Depending on the stock price, the dividend can range from 3-4%. Nothing to write home about, but consistent. When I match the stock with a covered call...More income. If it gets called away...Wait 31 day, buy again. Wash, rinse, repeat. I see nothing wrong with these moves.

I do not want to deal with power outages, systems down, Luckin going pink. I want to call and talk to someone live at Schwab and Fidelity...Sometimes I need hand holding, just me. You want to deal with an estate...I do not think Robinhood is for me!! I'm old school...Give me a hard copy, paper trail. If I do not trade for weeks (or months), it's OK. Bank CDs roll over, most stock money is invested in boring ADM type stocks. When we are not functional, a bank's trust department takes over. Do I want to be naked when the trust takes over?? Will they even look closely at our holding for weeks...Months??

I've been through the 1987 crash (no internet), the 2001 .com bubble, and 2007-8 crash. 2007 we walked our safe depost box from our bank (which closed a week later) to Wells Fargo. THE COST OF THE SAFE DEPOST BOX DID NOT MATTER. If it was $100. a year we would have got it. I sound like an old geezer, but I'm not. Just don't want headaches...

Laying it out there...Stupid or wise??

 

[Cabin111]

This imo would be the strategy to employ.
Stocks usually rally in anticipation of a dividend and more than 1-2%, sell on open one day before ex div date.

Edward Jones/Morgan Stanley..."Well, we should grab that stock before it X dividends". Retirees..."Sure, whatever you say". No, I do not use Edward Jones or MS, but I am sure that is the thought process.

 

[monkeyc]

Stock dividends are the biggest myth in fixed income investing. Dividends are zero-sum events. You gain nothing. Before, you had $10k in stock; after a dividend payout, you have $9900 in stock and $100 in cash. This is why dividends are subject to the same tax rules as capital gains: It's merely a partial sale of your stocks.

Don't confused dividends with interest, which is what fixed-income investing is. Bonds and CDs are true fixed-income investments.

 

[TimMykes]

Stock dividends are the biggest myth in fixed income investing. Dividends are zero-sum events. You gain nothing. Before, you had $10k in stock; after a dividend payout, you have $9900 in stock and $100 in cash. This is why dividends are subject to the same tax rules as capital gains: It's merely a partial sale of your stocks.

Don't confused dividends with interest, which is what fixed-income investing is. Bonds and CDs are true fixed-income investments.

Partially true

For some stocks, think reits and very blue chips , the div is considered an implied 'fixed income' , a stream of earnings passed along to the holder.

Of course, there is much more price risk in anything that isn't FI with a due date.

 

[eaglefeather]

I use dividends to buy OTM puts to tail risk hedge. During the market crash this year my hedge prevented losses. Dividends also have a mitigating effect on how low a stock can go apparently, if the company does not go bankrupt. So if hedged properly, dividends can finance puts or spreads rusk free.

 

[TimMykes]

your pitiful dividends cant hedge doodly

 

[murray t turtle]

Here are my thoughts. Most years I DO NOT PAY TAXES!!! My wife and I have so much medical/dental that we pay 0 in taxes. We also have Roth IRAs...Taxes already paid. So for us, taxes do not come into play. I am 65, my wife, 64...I've had two heart attacks. Think widow and orphan stocks for us.

So I can get 00.1% from a bank CD..It is a given at this time. Inflation is less that 2% as we speak.

Can we talk ADM...Pays their dividend like clockwork. Has paid it for like a gazillion years!! Depending on the stock price, the dividend can range from 3-4%. Nothing to write home about, but consistent. When I match the stock with a covered call...More income. If it gets called away...Wait 31 day, buy again. Wash, rinse, repeat. I see nothing wrong with these moves.

I do not want to deal with power outages, systems down, Luckin going pink. I want to call and talk to someone live at Schwab and Fidelity...Sometimes I need hand holding, just me. You want to deal with an estate...I do not think Robinhood is for me!! I'm old school...Give me a hard copy, paper trail. If I do not trade for weeks (or months), it's OK. Bank CDs roll over, most stock money is invested in boring ADM type stocks. When we are not functional, a bank's trust department takes over. Do I want to be naked when the trust takes over?? Will they even look closely at our holding for weeks...Months??

I've been through the 1987 crash (no internet), the 2001 .com bubble, and 2007-8 crash. 2007 we walked our safe depost box from our bank (which closed a week later) to Wells Fargo. THE COST OF THE SAFE DEPOST BOX DID NOT MATTER. If it was $100. a year we would have got it. I sound like an old geezer, but I'm not. Just don't want headaches...

Laying it out there...Stupid or wise??

%%
Wise/mostly.
Actually I've done better over the years with etfs that pay dividends.
NOT that the biggest dividend payers produce more profits\they tend to produce less profits/less gains.
Also have to consider the fun profitable broker message ''you have dividends!!''
The most common dividend pattern I tend to see;
a good dividend payer/Lo PE like dow tends to un- derperform/be bearish\go lower...………………………………………………………………………………………………..Like IBD notes ''never buy mainly for a dividend'' May miss the 0.6% yield in ICLN/ok profits are fine also.

 

[LaxFan]

Stock dividends are the biggest myth in fixed income investing. Dividends are zero-sum events. You gain nothing. Before, you had $10k in stock; after a dividend payout, you have $9900 in stock and $100 in cash. This is why dividends are subject to the same tax rules as capital gains: It's merely a partial sale of your stocks.

Don't confused dividends with interest, which is what fixed-income investing is. Bonds and CDs are true fixed-income investments.

This is how I've been viewing dividends for a long time. They're good if you're reinvesting the dividend into more shares at lower prices if the stock falls. So, they can help with dollar cost averaging and then hopefully the stock recovers and then you get your capital appreciation.

I had shares in SO for several years in a taxable account. Each year, I got the 1099-DIV and ended up paying tax on dividends even though as you said, the account value stays the same.

So I concur that they are zero sum events, and if you're dumb enough like I was to have a dividend paying stock in a taxable account, you end up paying tax every year even if your account value stays constant.