Pat: What do you think about a strategy of making money by buying stocks just before they pay a dividend, collecting the dividend and then selling the stock? Could this prove profitable? Thanks.

“Dividend capture” is the trading technique of buying a stock just before the dividend is paid, holding it just long enough to collect the dividend, then selling it. If you can sell it for as much as you paid for it, you have “captured” the… Read More

Companies that pay dividends have a “record” date. Does that determine who owns the stock on that day and who gets the dividend? If so, why not buy stock the week before the day of record, collect the dividend and then sell the stock? I know this would encourage churning, but for high-yield stocks, it could prove profitable.

There are a number of dates related to the payment of dividends.

Several weeks in advance of a dividend payment, a company’s board of directors sets the amount and timing of the proposed payment. The date of that announcement is known as the declaration date.

The… Read More