Comments on: Important Dividend Dates – Ex and Cum Dividend

By: Martin

Martin — Fri, 25 Sep 2009 20:53:05 +0000

Scott,
What do you mean by ‘I have been dividend trading around bank stocks’?
Is it like buying stocks before ex-div date and sell it the day after ex-div.date?

By: Scott

Scott — Fri, 21 Aug 2009 00:04:16 +0000

In an efficient market, the price of the stock should decrease on the ex-date by the dividend paid as investors buying the stock on the ex-date are not entitled to the dividend paid. Having said that, I have done some research on the big 5 Canadian banks to see how efficient they are. My research results show that the market usually (90% of the time) does not care about when the dividend is paid. They are buying bank stocks for long term capital gains. I have been dividend trading around bank stocks for a while now and have done quit well.

HOWEVER, do not forget about trading fees eating into your profits. I use Royal Bank direct. Their policy is that if you have less than 100K in your trading account or if you are not considered an active trader (something like 30 trades a month), your trading fee is 28.95 for every buy and 28.95 for every sell. If you have more than 100K in your trading account or are considered an active trader, the fee goes down to $7 per trade. I’ve actually used borrowed money on a line of credit at 5% and dumped it into my trading account in order to hit the 100K limit so that I can take advantage of the reduced fees for dividend trading purposes. You can just leave the funds uninvested, sitting as cash just as long as they are in your trading account.

By: Sher

Sher — Sun, 21 Jun 2009 15:07:21 +0000

I was wondering if anyone has ever come up with a list of ex-dividend dates for Canadain Companies? And if they are will to share… Thanks

By: Stock Investing Guru

Stock Investing Guru — Sat, 24 Jan 2009 17:20:41 +0000

Dividend investing is very important for times like these. Try preferred stocks and high-yield bonds. They are a much safer and less volatile investment during these tumultuous times.

By: Dividend Growth Investor

Dividend Growth Investor — Fri, 23 Jan 2009 14:03:55 +0000

FT,

Thanks for the detailed explanation. When people learn that they need to own the stock only for a short period of time they start deluding themselves that they could just capture the dividend and also have small capital gains. The main issue is that traders with a short-term mindset who are trying to take advantage of the dividend capture strategy could be exposing themselves to severe market volatility. This strategy could be profitable during bull markets as stock prices in general increase which would help the speculators in unloading their position at a profit; during bear markets when the volatility is very high, the risk of catching a big wave down is much higher

By: Personal Finance Ology

Personal Finance Ology — Fri, 23 Jan 2009 01:31:28 +0000

Lesson Learned the Hard Way: You must buy a stock on the day before the ex dividend date to receive the next dividend.

I bought some GE on the ex dividend date and then was very disappointed when I did not receive my dividend. Lesson learned. Thx for the good info. I didn’t know about the cum dividend.

By: Erick

Erick — Thu, 22 Jan 2009 19:22:05 +0000

On a semi-unrelated topic…if you’re DRIPing your US dividends, how do you calculate the change in your ACB in Canadian dollars?

I figured you could just use the exchange rate of the initial stock purchase…but what if you’ve made several purchases at varying exchange rates?

Can you just use the exchange rate posted by the Bank of Canada for the date the dividends are re-invested?

Thanks!

By: FrugalTrader

FrugalTrader — Thu, 22 Jan 2009 17:14:26 +0000

Matt, you would have to check with your MF with regards to the dividends that they receive. That’s the problem with dividend MF’s, their MER’s really dig into the dividend yields.

Jared, I’ll work on a list!

By: Jared

Jared — Thu, 22 Jan 2009 16:41:09 +0000

Hello,

Is there a good list (ideally free), of all of the upcoming dividend dates for Canadian and American stocks?

By: Matt

Matt — Thu, 22 Jan 2009 16:21:08 +0000

How do dividend paying mutual funds and ETFs work? My MFs pay annual dividends but their underlying assets (stocks of dividend paying companies) distribute dividend quarterly. Is there a data of record for MF?

Matt

By: nobleea

nobleea — Thu, 22 Jan 2009 15:50:22 +0000

Tommy,

you will get the payout regardless if you actually own the stock on the payout date. as long as you owned it before ex dividend.

in a normal market, the stock will usually go down on the ex-div day by an amount almost equal to the dividend.

By: Tommy

Tommy — Thu, 22 Jan 2009 15:38:29 +0000

Question.
If i bought the dividend stock before the ex-dividend date and sell it on the ex-dividend date or after, do i still entiled for the dividend payout?
or do i need to wait til the payout date?

By: canucktuary

canucktuary — Thu, 22 Jan 2009 14:52:11 +0000

In theory the price of the stock should adjust after a dividend payment is announced. So if you were to sell the stock before the ex-dividend date you would theoretically sell at a higher price.

I’m not sure in practice if it always works out this way.