In the ATT example you can see a few days prior and a few days after the ex dividend date, the price goes back to even, and actually goes up. A way around this is to buy the stock a few days prior and sell a few days after. This will guarantee the dividend, without worrying about losing value

@mostlikely...

2 жыл бұрын

^^

Clear video. Although I disagree with your blanket conclusion that it's not a good strategy. Select dividend stocks which recover quickly historically, and sell when your buy price is reached. This may be on the ex-dividend day, or it may be a few days/weeks later.

@jeffsmith4110

4 жыл бұрын

But whether they recover or not has nothing to do with the dividend. The video's right.

@vadimniessen

4 жыл бұрын

@@jeffsmith4110 No, because the conclusion is false. Read the comment.

@eclipsed4utoo

3 жыл бұрын

Agree with Damon here. If you take a look at 4:03, you will see that the open price on Apr 12 is just 9 cent lower than the close price on Apr 8. If you bought on the 8th and sold on the 12th, you would still lose that .09/share, but the net would be .42/share because of the dividend payment. Of course, this can't be guaranteed by all stocks if you use this strategy, but in this stock climate, it would seem pretty each for an individual stock to recover from that drop at ex-div date very quickly.

@alleneverhart4141

3 жыл бұрын

I agree with Damon. Michael gives you a single 'fail' and concludes that the strategy doesn't work. No strategy will give you 100% winning trades. I give him an F for his analysis. I challenge Michael to tally up the percentage of stocks with a 4% to 8% yield that fill the gap-down from the ex-eve closing price in 4 days or less. IMHO the dividend-capture strategy is the only strategy that has any edge that I can point to. (edit: I just did a TOS scan for stocks with 4-8% yield, minimum price $1, minimum volume 10,000 and there are 950 of those. Then I added a filter for the maximum number of days to fill the ex-gap less than or equal 4 and found 639 of those. So the probability of a relatively fast capture in the last year is 67%. If you can wait as long as 10 trading days then the probability climbs to 77%. In previous years I have seen rates in the 80-90% range.)

@gavinking77

3 жыл бұрын

Agree with you on this, buy a short term put option if the price remans low or goes down and still make money? Wonder if the option can be purchased for a small price as it is leveraged.

So I been doing this for awhile now and I kindly disagree with there not being a benefit to this. First of all yes the prices of the stocks do go down on the ex dividend date. No surprise there but I never had to hold onto any of these stocks for more than five trading days to get my stock price back. I usually sell for a penny over the price I bought the stock. Then taxes. Ok so I go to work in retail for wages. I would much rather do this and have it taxed at my wage rate than standing for 8 hours a day having to wear a mask and deal with the stupid public. I hope to just do dividend capture as my career. I am making so much money off this I kick myself for not doing it sooner. I can literally make two weeks of net wages in a few days with just a few clicks! Dividend capture gets a bad name. People think you must sell the exact second you get the dividend. Case in point: I made $750 on just the dividend on my last trade. And I do these captures like every few days depending on the stock.

@F4Y541

2 жыл бұрын

I'm doing this for the first time, using Microsoft's ex-div which passed on the 18th the other day. Do you have any advice I can take up on from early? any Apps, books, and influencers who can guide me to follow this dividend-chasing journey??

@mostlikely...

2 жыл бұрын

^^

@serbanescugabriel

2 жыл бұрын

What companies do you do dividend capture strategy? Do you have a spreadshit with the dates or how do you know when to buy and Sell?

@mysterybuyer3738

2 жыл бұрын

@@serbanescugabriel I don't put anything on spreadsheets at all I just keep the dates in my head. After the ex dividend date I simply check on the stock price each day and if I think I made enough money at it then I sell. But a note of caution is I was mainly doing this when the market was at all time highs but now it might be a little harder because of the downward pressures of higher interest rates etc. As for the companies, I have done Exxon, Siri, cango (which was a disaster) R Riley, torchlight, energy which I am still waiting for the dividend after a year of holding. Vinco Ventures, still waiting on it. and many more I can't recall at the moment. It's basically been hit or miss. Sometimes off some of them I make a good amount it just depends how much I put into them.

@CanadianFinanceSimplified

11 ай бұрын

@@mysterybuyer3738 I think the point that needed to be emphasized in the video is that you have to compare the strategy to something else you could have done instead. You mentioned you were doing well with this in a bull run which makes sense but then for dividend capture to be special, it would have needed to outperform just holding the S&P 500 let's say.

Buy the declaration, sell the X-Dividend Date!

@tecnolover2642

3 жыл бұрын

A declaration doesn't guarantee the price will go up lol...

Just wait until price recovers before selling!

I disagree with this video.. because i have been doing this for a month now with $500 and i turned it into $792.13 ... granted sometimes i wait 1-4 days for price to recover. But it works if you choose the dividend stock wisely

@MichaelJayValueInvesting

4 жыл бұрын

Turning 500 into 792 in a month is a 58% return. Annualized that is a 24,800% rate of return. At that pace you will be the richest man on Earth in less than 4 years. Please be sure to come back and say hi then :)

@aperson1181

3 жыл бұрын

So when do you sell? Do you have to sell after the payout date? Can you sell after the record date? I thought that you cannot sell before the payout date.

@vkdrk

3 жыл бұрын

@@aperson1181 you don't have to wait until the payout date.

@hamidnasir8353

3 жыл бұрын

@@MichaelJayValueInvesting you recon it is easy to capture dividend trading an ETF?

@amritosarkar6917

3 жыл бұрын

@@vkdrk Hi Vladimir Putin 😂😀😂😀

Good to have you back! you are a very factual based and valuable information source, hope you keep up the good work 💪🏼💪🏼

What I like to do is pick a low-cap stock with a super high dividend yield and buy it a month or two in advance, anticipating that more people will pour in trying to capture the dividend, then I sell out the day before the ex-dividend.

@critenks229

4 жыл бұрын

except other investors will do that too.

@marine5546

4 жыл бұрын

If you're buying before the dividend is declared, it'll be cheaper, but you never know if the dividend will be cut or even declared at all.

We’ve missed you Michael. 🙂 Coming back strong with those dividends 💪🏼

@plummerwedderburn1432

5 жыл бұрын

Yeah I haven’t seen many new videos lately! GME was down 35% today. I think finding great companies is crucial. The value approach that brought Newell Brands, Venator Materials & Game Stop is not likely to ever break even. It is possible that this reality is going to be the subject of a future video here. I like his Drafts segment and we can see how his picks stack up against a passively managed S&P 500 index fund.

MJ, interesting... and as always your usual no-nonsense advice. Hope you are doing well. 🙂

A backtest on the stock prices potentially catching up after ex-dividend would be interesting. Personal and non-statistical observation is that stocks tend to rebound after ex-dividend date quickly. If so, you could harvest dividends but not as directly as newbie investors sometimes expect if they have not yet learned about the ex-Date/ ex-price

@joed5419

2 жыл бұрын

The other side of this coin could be to but the stick a week or so in advance of the ex-dividend date in anticipation of the price running up to the ex-dividend date and then selling before the ex-dividend to others looking to collect the dividend.

Great info. Thank you for the well explained topic.

I have always wondered what empirical data there is on this topic. Great video. Really enjoyed it.

@TheBlueking1987

5 жыл бұрын

The data says the price declines less than the dividend payment probably due to taxation. So unless you have significant taxation differences there is no arbitrage possibility. However international taxation is different by country of residence, type of international tax treaties and type in of company.

If the dividend price is adjusted solely because of the dividend payout then why not hold the stock until it adjusts back up 1-2 weeks later

@critenks229

4 жыл бұрын

cuz this plan backfires sometimes. like take a look at the historical price of AAPL.

@tecnolover2642

3 жыл бұрын

What makes you think it would go back up in two weeks? Maybe it will fall lower? There are no guarantees in the market.

@ricomajestic

2 жыл бұрын

@@tecnolover2642 That's why you sell a covered call when doing this strategy.

What about buying on declaration and selling after ex-dividend date, only using stocks that show signs of growth over that time?

As a new investor this makes sense and explains why everyone doesnt do this. Thank you

Thanks. No ones explained it like this

In your example of at and t you can quite clearly see that if you bought the stock on Apr 4th and sold it on Apr 16th youd of gained in the overall share price as well as captureed the dividend over a period of 12 days and be in a position to repeat the process with another company. Based on your example and the 12 day timeframe you could repeat this approximately 30 times a year. You have to be aware of the big picture, fees, taxes and buy and sell at the right times but if you get it right the compounding effect can beat any savings account or long term hold IMO

@MichaelJayValueInvesting

3 ай бұрын

You have to hope that the share price rises in every one of those examples for you to get the full compounding effect you describe. Try running the math when a few go negative following the ex-dividend date and see how that affects your results.

I've had to speed this up 1.75x because he speaks so slowly but holy shit this video is helpful

@notmyname7758

4 жыл бұрын

Hahaahhahha

Does the stock drop represent the full dividend or the after tax one as that is the real 'loss' of missing a dividend payment?

Legend cheers for that bud, i thought it couldn’t be that easy and I was right!!

Wow, Michael. This was great information and a really well done video. Thanks!

DID THAT WITH MSM EARLIER THIS YEAR. GOT THE QUARTERLY DIVY PLUS SPEACIAL 🤑

what if you buy put options to hedge that risk?

For day traders, this is probably not an optimal strategy. For mid-long term traders, a much better idea.

New vid finally!! Love it Michael

So, for those Selling Covered Calls on dividend stocks, BEWARE yer Ex Date and Call price !! Thar be Sharks in the waters !

So I am about to be starting this strategy. This video definitely helped explain the risks better for me, however I am still going to try with a slightly different approach. If it works then great, If not, then I just learned another thing not to do in the market.

@CanadianFinanceSimplified

11 ай бұрын

Did you end up doing it? Results over a short period of time shouldn't dictate if something works or doesn't though. Bull/bear markets can last a long time and mess with your assessment.

Hi Michael good to see you back! When will you do the DRAFTS? That’s my favorite part of your channel!!! 🏆

Could a possible (higher risk) strategy be to short the stock using a CFD on the ex dividend date and closing the short the day after the dividend is paid out?

@MichaelJayValueInvesting

5 жыл бұрын

Good question! As a short you will have to pay out the dividend from your own pocket so it negates the gain from shorting the drop.

I believe that in Roth IRAs, you wouldn't need to worry about paying any capital gains tax using this strategy

@saulcohn4844

4 жыл бұрын

yup..funny video mention that!

I'm gonna combine dividend capture strategy and the scalping strategy. I will buy a stock the day before the dividend capture strategy and I'll hold on to it until it scalps. However, I'll sell that stock after about two weeks regardless. However, I'll hold onto stocks that offer DRIP.

Damn you market efficiency!!!

@MichaelJayValueInvesting

5 жыл бұрын

Very hard to get around it!

I’ve been looking for vids on this strategy for a few days now. Glad you popped up. Best explanation I’ve seen so far.

@MichaelJayValueInvesting

3 жыл бұрын

I appreciate that, thanks. I actually created it because I was frustrated by a lot of the misinformation about this strategy being marketed as risk-free or low risk.

what is a good website I can check those dates?

So do you need to buy before ex dividend date and sell on record date? Or do you not even need to own it on the record date?

@darknessfierce4209

Жыл бұрын

Need to own prior to ex date Record date is t-2 need to own 2 days prior

You can still take advantage of international taxation differences. I pay 54% tax on dividends received from limited partnerships (us withholding tax plus national tax) but only 27% capital gains will tax. So I will sell the shares one day before ex dividend Date and buy back later. The share price decreases more than 46% of the dividend on average in my backtest. I assume this strategy to work since most shareholders pay less than 54% tax on dividends.

@Sam-ue4rv

Жыл бұрын

Ok Billionaire.. You found the Holy Frail formula

Welcome back Michael!!

@MichaelJayValueInvesting

5 жыл бұрын

Good to be back :)

If you do the dividend capture strategy in your Roth Ira would you still be taxed the same?

If your dividend is pending, will you still receive it if you exit to position before it's received?

Buy the stock and sell an in the money Call against it? Ensuring the extrinsic value of the Call is greater than the dividend eliminates assignment risk and the intrinsic value protects against falls in the stock price.

@seaking1006

3 жыл бұрын

explain please

Wait, can't you just buy the stock a few days before the Ex-Dividend Date and sell before it drops so you effectively get the dividend, while not holding on to it in long run? Obviously with this method you would still have deal with short term capital gains tax. So maybe buy in to a stock that has a high dividend yield, which usually has a depreciation on the stock so you don't want to hold on to the stock long term anyways, and sell on the rise up and then deal with the taxes later on. Just a possibility...

Good video thanks

just buy 2 or 4 days ahead and wait til it goes up after dividend (patient is the key) i only do this with 4 stocks a month sometimes 3 and sometimes 2 because the recovery time is long to make the sell break even.

Hi Michael, great video. Subbed right away. Quick question though - Do you have to buy the stock within normal trading hours the day before the ex dividend date or could you buy it during after hours or even premarket that day if the price was low enough to justify it then? Additionally, on the ex dividend date, do you have to sell it during normal market hours or could you sell it right away at say 3:01 AM CDT? Same question for can you sell it after hours and still receive the dividend? Thanks!

@MichaelJayValueInvesting

5 жыл бұрын

Glad you enjoyed and welcome! If you are able to get it afterhours the day before the ex-div date, then you should still get the dividend. However, liquidity will not be high afterhours so your best bet is to use the trading hours during the day. Additionally, you could sell right at market open on ex-dividend day, but be aware the price will be lower to reflect the dividend drop. It is important to know that dividend capture is not an arbitrage situation.

@Dk-pi1wd

5 жыл бұрын

Michael Jay - Value Investing thanks a lot for the quick and thorough response. Your sub count should have 2-3 zeros tacked onto it.

@prepperminded5732

3 жыл бұрын

@@MichaelJayValueInvesting So sell the security ON the ex-dividend date in order to get the dividend? What about the "on record" date which is usually after the ex-div date?

@darknessfierce4209

Жыл бұрын

Record date is t-2

The author must never have tried this technique. I have made thousands off of this strategy. He totally doesn't even mention that most stocks are usually bid back up into the "range" within a week or two of the ex-dividend drop . If the stock rebounds only 1 cent on 2000 shares, you've made $20. What if only rebounds 5 cents? or a dime?....that's a $100 and $200 return respectively. These returns are very common and usually the rebound returns to near the ex-dividend date price within 2 weeks. Ib the AT&T case, I would settle for a 25 cent rebound for a tidy $500 dollar return on 2000 shares.

Missed your insights Michael. Great video as usual. Please share your thoughts on TSLA and NWL in the short and long term. Wish you good health and wealth.

@MichaelJayValueInvesting

5 жыл бұрын

NWL as a turnaround play will take some time to pan out, though given the high debt is not a guarantee. Given my current NWL exposure I am not adding any more. TSLA has had a lot of red flags for a while, I have and will continue to say clear. Thank you and likewise!

So buy puts on ex-dividend dates

Hi Michael, could you do a follow up video for dr.burrys portfolio changes ?

@MichaelJayValueInvesting

5 жыл бұрын

In the works.

Why not just wait until the stock price recovers and then sell?

Hi guys. I am due my first dividend payment can I sell on the record day?

so why dont you just purchase the stock 1 week before the ex-dividend day

Read your comment on Sven Carlin video that you own NEE. I do as well. Fantastic company been on an incredible run still with huge growth ahead and just joined the dividend aristocrat tier this year. Just wanted to hear your thoughts on it thanks

Seems like you used to post several times a week, did your video posting schedule slow down? Just wondering if you’re planning to stay active here. If not do you have investing channels you can recommend?

Can we capture the dividend payout while shorting a stock? Since the following trading day after ex-dividend will have lowered adjusted pricing.

@jacobrybicki1590

4 жыл бұрын

Go for it bull you'll pay the dividend out to whoever you borrowed the shares to short from lol

@saulcohn4844

4 жыл бұрын

@@jacobrybicki1590 and margin interest on short right?

What if you included options in the mix?

Dividend Capture seems to rely on shares recovering after dividend price drop.

So isn't shorting ex dividend dates better? If it is guranteed to adjust

@MichaelJayValueInvesting

5 жыл бұрын

As a short you will have to pay out the dividend from your own pocket so it negates the gain from shorting the drop.

@MichaelJayValueInvesting

5 жыл бұрын

Good question!

@danielkariti8641

5 жыл бұрын

Thank you

@isaiahferreira5267

4 жыл бұрын

How would you be paying dividends out of pocket? You buy Puts through TD no commission and wait for dividend price adjustment and sell your puts. No paying out of pockets for dividends dude

@ginsederp

4 жыл бұрын

@@isaiahferreira5267 Other people would think of this strategy too, so puts would be priced in with that in mind.

Suppose I have 30 shares and wanted to add 600 shares for 2 days . Then sell the 600 shares and keep the 30 would I get to keep the dividend for 630. Also what cons would I have for doing this.

So when do you sell? Do you have to sell after the payout date? Can you sell after the record date? I thought that you cannot sell before the payout date.

@MichaelJayValueInvesting

3 жыл бұрын

You can sell anytime, but if you sell before the ex-dividend date you will not receive the next dividend. Though note, I generally don't think there is much value in these short term dividend capture strategies and prefer to hold stocks long term.

@hellobello3153

3 жыл бұрын

@@MichaelJayValueInvesting Hi Michael. Can one sell the morning of the ex-dividend date and still receive the dividend?

What if there's no ex dividend date, but is a dividend pay date.

If this doesnt work. Could you then turn it into a quant strategy and just short the shares prior to ex div? If the div drop is consistently more than the div...

@MichaelJayValueInvesting

Ай бұрын

It isn't necessarily that it doesn't work, it is just that there is no guarantee on how long it takes for the stock to recoup the ex-dividend loss. Sometimes the stock price goes back up fairly quickly, but other times it can take a long time which is the primary reason why I say the strategy "doesn't work". If you are planning on rolling that capital into another dividend capture, you may have to book a net loss for stock that take a while to recover. Shorting would mean you have to still pay the dividend, but you could benefit if the drop is consistently larger that the dividend. There likely isn't too much alpha there but it is possible. I have noticed for Altria (MO) a large dividend stock, that the stock price tends to drop more than the dividend following ex-dividend in the 1-2 days following. Not a guarantee of future results, just an interesting observation...

So in a nut shell, find stocks that are about to pay a Div. Disregard the high taxed chump change of a Div. and buy the expected dip that would most likely recover, thus making more than you would with the Div.

You should have used a company that paid a bigger dividend like 3M or ABBV.

I never understood this strategy. Stocks fluctuate on a daily basis. If you're not going to get the tax break why not just trade it several times a month instead of waiting for an ex dividend date? You could buy AT&T and get that 51 cent fluctuation a lot more than once every quarter.

Yey, new video!

@MichaelJayValueInvesting

5 жыл бұрын

This one is a short one but I had a few questions on dividend "capturing" and thought I would share my thoughts. Hope you enjoy!

@sorenos

5 жыл бұрын

​@@MichaelJayValueInvesting Sure did. I actually had the same thought of capturing dividends recently, and looked up how share price changed on the dividend date like you... And reached the same conclusion. No easy millions there either. :( It could be interesting to see if there might be a statistically significant run on stocks 1 week or something before the ex-dividend date, because of other people trying to capture dividends. But I feel like algorithmic traders will probably also have snatched anything there might be gained there.

correct me If I'm wrong but if you had $1000, could you not place a buy for $500, collect the dividend yield on that $500, and also short the same stock $500. Then if the price goes down, the profit earned from the short covers the loss of the share value decreasing and vice versa? So you will lose maybe 0.25% on the trade due to the spread, but if the dividend yield were 4%, you still gain 3.75% I could be overlooking something very obvious here but just my thought

@MichaelJayValueInvesting

2 жыл бұрын

Nice idea, but what you are missing is this: If you short shares you will have to pay back the divided you received to the owner of the shares you shorted. No free lunch!

@BrandonRodriguez-sc2xq

8 ай бұрын

@@MichaelJayValueInvesting Couldn't you use options as a form of protective hedging (PUT). Lets use qyld for example with a high monthly dividend. After collecting dividend sell position in stock and put.

Well, dividends are counted as income and not capital gain here. I will buy undervalued bank stock for the payout.

JLY

Wow, if this was true you should short the stock just before close the day before the ex-dividend date.

@MichaelJayValueInvesting

4 жыл бұрын

You would then have to pay out the dividend to the person you are borrowing the shares from. No free lunch! :)

@AussieGirl235

4 жыл бұрын

Or just buy on the day it drops and sell when it reverses

@DerekWicks

4 жыл бұрын

Michael Jay - Value Investing is this still true if you buy puts in options?

So why not just find all stocks that have ex div dates tomorrow and short them by end of day today and then buy back lower tomorrow after the drop.

@zachhargraves3966

3 жыл бұрын

You would end up owing the dividend to the people who buy the stock so would still wouldn’t be worth it

I was wondering if you still in the future of gamestop. I've lost a substantial amount of money after investing a few months back when they had the acquisition rumors floating. please help. not sure what i should do at this point. please

@Eko_Kats

3 жыл бұрын

Well you know now

There were a couple dividend capture ETFs about 10 years ago. They all closed. This strategy didn’t work.

hey uhh thanks ;)

can you just sell the stock prior to the ex dividend date and make a profit that way?

@Derek_1111

3 жыл бұрын

Yes many people use this strategy. They buy weeks before the Ex div date with the theory that price will be bid up heading into the ex div date and then sell the day before the date locking in profit. Not sure how well this strategy works as I haven't really back tested it myself.

It works at times.. I still don't understand somethings like why low share price and high yield.. Rather have share price rise..

You don't need to hold the stock true the day on ex-div date. The dividend will be given to the person holding the stock at market close the day before ex-div date

AI should make this profitable in short term but long term kill itself

Kinda sounds like you haven't used this approach yet though... Nor is this a proper rundown of the strategy. Price usually dips about a week out from ex dividend and you can't sell on ex dividend date, you have to wait until record date... Video seems biased, initially I wanted to hear your reasoning, but the fact one can tell you haven't tried it out for a couple days...

@MichaelJayValueInvesting

3 ай бұрын

I have never met anyone who has made significantly above average returns doing this strategy. If you think I am wrong, definitely try it out yourself if you think there is an edge. I have done the reverse strategy a few times though selling before ex-dividend to realize capital gains then buying back ex-dividend. That worked out the few times I did it but was situational and I don't consider it a driver of alpha.

Before watching this video I was under the impression he had a successful dividend capture strategy. Why make the video otherwise?

Wrong

I think this strategy is only good for the government, because they tax your dividend. 😄

...No. You forgot the RECORD DATE - you've got to hold it PAST that day.

bahahahahaha man what a joke this video is this industry is a joke

This video was long and provided no new insights or knowledge about dividend strategies that are not already widely known. Skip 😒