Lux Investing
does anyone have experience with dividend harvesting? Does it work?
Dividend harvesting involves buying a stock shortly before the ex-dividend date, then selling after holding for a short period afterwards. Does anyone have any experience with investing in this manner?
Public Comments
- Dividend Harvesting is when you buy the stock before the dividend date and then hold it until it return to its original price, so that you break even on the stock and reap the dividend. This is a common practice with REIT the have consistent predictable growth. I tried it with a shipping company and have made good money only to lose it the next go around( maybe I need to skip every other div period , LOL) My returns on REIT were more consistent but the dividend were lower 5% vs 15% with the shipping company.
- Make sure you factor in your transaction costs in the equation. And technically you should also factor in, or out if you will, how much you would have earned if you simply left it in a money market account.
- The dividend comes out of the price of the stock. There is no free lunch on Wall St. Plus after paying buying/selling fees, you're making the broker very happy.
- It is not called dividend harvesting but dividend capture. This strategy works and many corporate Treassyrers used to employ this before the black monday of 1987. Now nobody does it since it catalyses the 'triple witching hour' a time period during the expirty of options, options on futures and futures which triggers heavy volatility of the stock market. So before the Regulators banned all this on a compliance basis everybody stopped in 'portfolio insurence' and one of the other thing they stopped for stable market maintainance is 'dividend capture'
