Hey traders and investors,
When you are investing in a stock you have one major goal – to generate profit. It seems pretty obvious – you should sell stocks at a price higher then you bought it before, thus fixing your profit.
But there is one thing that a lot of newcomers in the stock market forget about. Today we would like to discuss how dividends can improve you overall performance.
Finding the right stocks for trade is one of the crucial steps to performing well in the market. High dividend yield can bring some extra income to your buy and hold strategy, or it can be the cornerstone of your dividend capture strategy itself.
Long term dividend strategy.
Classic dividend income strategies are usually concentrating on holding stable dividend paying stocks to generate a steady income stream.
Buying such kind of stocks you expect both capital gain and dividend income. The only question is to find right stock that generate them both.
It usually takes a lot to do your own research, which is why all these professional advisers, hedge funds, mutual funds, etc. tend to charge a fortune for their services. But what would you say, if we have already done it for you?
All you need is just Bullboard Stock ideas. One of our featured stock lists covers companies that paid highest dividends for the last 50 years.
Jump in and discover them with our triple screen view, which gives you three main timeframes together with with key performance indicators, including dividend yield.
It had never been that easy to find appropriate trade ideas.
Dividend capture strategy.
The dividend capture strategy focuses on quickly capturing dividends without holding onto a security for a long period of time. In simple terms, the strategy is executed by purchasing a dividend-paying stock prior to its ex-dividend date in order to secure the payout and then selling it the next day or after the stock bounces back.
Dividend captures typically are executed with a short term time horizon where the underlying stock could sometimes be held for only a single day. The idea is to generate a greater profit from the dividend yield than the loss incurred by buying and selling the stock.
One of the primary advantages of the dividend capture approach to trading is that there are numerous companies that pay dividends on a daily basis.
There are four key dates that traders must know to execute the strategy:
Declaration Date – The day on which a company announces its next dividend payout date, which is usually done via a press release, conference call, etc.
Ex-Dividend Date – On (or after) this date the security trades without its dividend. If you buy a dividend paying stock one day before the ex-dividend you will still get the dividend, but if you buy on the ex-dividend date, you won’t get the dividend. Conversely, if you want to sell a stock and still receive a dividend that has been declared you need to sell on (or after) the ex-dividend day. The ex-date is the second business day before the date of record.
Record Date – This is the date on which the company looks at its records to see who the shareholders of the company are. An investor must be listed as a holder of record to ensure the right of a dividend payout.
Payment Date – The day that the dividend should be deposited into the trader’s brokerage account and the profit is realized.
Next time we will deeply describe how dividend capture strategy can be easily executed with Bullboard mobile app. You actually do not need anything except Bullboard.