Popular (BAD) Dividend Strategies - How Dividends Work - Ex-Dividend Date Explained | Summary and Q&A

TL;DR

Understanding the ex-dividend date is crucial for dividend investors, as it determines eligibility for receiving dividends.

Key Insights

• 🧑‍🤝‍🧑 Four important dates in owning a dividend stock: declaration date, record date, ex-dividend date, and pay date.
• 😑 Buying a stock before the ex-dividend date does not guarantee a profit from the dividend, as the stock price usually adjusts to offset the dividend payment.
• 😑 Shorting a stock before the ex-dividend date is not a profitable strategy, as the seller is required to pay the dividend amount.

Transcript

hi i'm jimmy in this video we're going to look at some of the features of dividend stocks as well as some strategies uh let's call it do's and don'ts of dividend investing strategies now i'm going to use the company lockheed martin as our real life example so this video idea actually came from a question i got the other day on a on the lockheed mar... Read More

Questions & Answers

Q: What are the four important dates to know when owning a dividend stock?

The four important dates are the declaration date, record date, ex-dividend date, and pay date.

Q: How far in advance does the ex-dividend date usually occur before the record date?

The ex-dividend date is typically one or two business days before the record date.

Q: Can buying a stock right before the ex-dividend date guarantee a profit from the dividend?

No, because the stock price usually drops by the dividend amount on the ex-dividend date, which offsets the dividend payment.

Q: Is it possible to short a stock before the ex-dividend date to profit from the expected price drop?

Shorting a stock before the ex-dividend date is not a viable strategy because the seller is required to pay the dividend amount to their broker.

Summary & Key Takeaways

• The video discusses important dates related to owning a dividend stock, including the declaration date, record date, ex-dividend date, and pay date.

• The ex-dividend date is the date investors must own the stock to be eligible for the dividend payment.

• The video explores the dividend capture strategy, which involves buying a stock before the ex-dividend date and selling it after receiving the dividend.