Investing 102

[GregWeld]

Originally Posted by Sieg

Ding.......the 100 shares I recently bought must not have cleared in time to qualify as on-record. I thought they'd make the date as that was factor when buying, I'll have to check the details on this one.

Thanks.

You have a settlement date before they went EX?


When a company declares a dividend, it sets a record date when you must be on the company's books as a shareholder to receive the dividend. Companies also use this date to determine who is sent proxy statements, financial reports, and other information.

Once the company sets the record date, the stock exchanges or the National Association of Securities Dealers, Inc. fix the ex-dividend date. The ex-dividend date is normally set for stocks two business days before the record date. If you purchase a stock on its ex-dividend date or after, you will not receive the next dividend payment. Instead, the seller gets the dividend. If you purchase before the ex-dividend date, you get the dividend.

[protour73]

That's like the 10,795th thing about investing that I've learned from this thread...... another Weld-pearl-of-wisdom

Originally Posted by GregWeld

When a company declares a dividend, it sets a record date when you must be on the company's books as a shareholder to receive the dividend. Companies also use this date to determine who is sent proxy statements, financial reports, and other information.

Once the company sets the record date, the stock exchanges or the National Association of Securities Dealers, Inc. fix the ex-dividend date. The ex-dividend date is normally set for stocks two business days before the record date. If you purchase a stock on its ex-dividend date or after, you will not receive the next dividend payment. Instead, the seller gets the dividend. If you purchase before the ex-dividend date, you get the dividend.

[GregWeld]

Originally Posted by protour73

That's like the 10,795th thing about investing that I've learned from this thread...... another Weld-pearl-of-wisdom

THE KEY THERE IS TWO BUSINESS DAYS.... Weekends are NOT business days!

[Sieg]

Originally Posted by GregWeld

You have a settlement date before they went EX?


When a company declares a dividend, it sets a record date when you must be on the company's books as a shareholder to receive the dividend. Companies also use this date to determine who is sent proxy statements, financial reports, and other information.

Once the company sets the record date, the stock exchanges or the National Association of Securities Dealers, Inc. fix the ex-dividend date. The ex-dividend date is normally set for stocks two business days before the record date. If you purchase a stock on its ex-dividend date or after, you will not receive the next dividend payment. Instead, the seller gets the dividend. If you purchase before the ex-dividend date, you get the dividend.

I thought I honestly thought was ahead of the Ex date, but obviously I was not.

Trade Date: 12/30/2013
Settle Date: 01/03/2014
Ex Date: 12/26/2013

Not the first time I've tricked myself.........regretfully it won't be the last either.

That was TWO bags of dog food!

[Sieg]

Originally Posted by Vortech404

Sieg,

209 shares x .48 += $100.32

John

........and technically you're wrong.

109.xxx in hand and 100 in the bush equals 109 x .48 = $52.43

[protour73]

So many on this thread have talked about using Schwab's research tools and utilizing Google and Yahoo finance pages. I also refer to Seeking Alpha and The Motley Fool websites as well.

......but does anyone have any other reliable sites that help doing research on a company that sells stock that interests you??

[GregWeld]

Originally Posted by Sieg

I thought I honestly thought was ahead of the Ex date, but obviously I was not.

Trade Date: 12/30/2013
Settle Date: 01/03/2014
Ex Date: 12/26/2013

Not the first time I've tricked myself.........regretfully it won't be the last either.

That was TWO bags of dog food!

Okay --- but let's talk about a DIFFERENT WAY TO CAPTURE THE DIVIDEND.... and that is trading on the "EX" date.

So -- MOST (not always) of the time a stock will go down almost the identical amount of it's dividend payout on or near it's "EX dividend" date. So let's say
the stock was trading at $50.. and pays a .50 dividend - most of the time even if everything else is trading up that day - you'll see the stock trade down by 50 cents to $49.50. So if you bought that day - basically at a 50 cent discount - and the following day the shares go right back up to $50... you effectively got paid that dividend. You just got it as a discount rather than cash.

Now to do these things - a guy has to be pretty damn active and on the ball. And being on the ball can be very important....

But let's be real here -- it's one thing if you're trading enough shares to make getting that particular dividend "this quarter" (let's say the 12 grand I just got on my MO shares -- guys! That's real money I don't care who you are)... but it's another if you're talking picking up $50 for the quarter... You know - how much effort can you put in to making sure you're going to get that $50 dividend? Yeah it's $50 --- and $50 is $50.... but it's really more important that you just get in to the stock you want to buy or add... Because the day you bought and paid the full $50 each for the shares -- and you missed the dividend and blah blah blah ---- the next week might be the week the market jumps 5% and now your shares are worth $52.50....

So had you realized you'd missed the dividend payout --- and then waited a whole quarter to get in ---- you might have missed the move UP for the entire year.

But you must be careful (which is why I don't usually bring up all this kind of stuff in Investing 102) because trying to trade this way has BIG tax implications that must also be considered! So trading like that inside an IRA or ROTH is one thing --- but in a TAXABLE account -- there are taxes to account for! And taxes on trades can get real big real fast... there's a ton of rules a guy would have to consider... The WASH SALE for instance...

Let's not even turn this into a tax and trading thread... that's just a whole other bailiwick.

There is a website devoted to dividend TRADING -- guys trying to buy the stock pick up the dividend - and then get out and buy another stock to get that dividend and so on - I think it's mostly based on this theory that the stock dips on the ex date and recovers. I've never tried it.... but I'm sure if you're lucky enough and have enough time to "work" at doing that - there's probably a way to make money.

[GregWeld]

Originally Posted by Sieg

I thought I honestly thought was ahead of the Ex date, but obviously I was not.

Trade Date: 12/30/2013
Settle Date: 01/03/2014
Ex Date: 12/26/2013

Not the first time I've tricked myself.........regretfully it won't be the last either.

That was TWO bags of dog food!

OKAY --- LET'S DISCUSS "OWNERSHIP" ---



You didn't OWN those shares until the SETTLE DATE -- 01/03/2014

So if you're going to try to capture the dividend and play that close to the vest on this stuff.... then you need to allow for the SETTLE DATE which is THREE BUSINESS DAYS. So if EX date was 12/26 -- then you needed to BUY on 12/23 and get a SETTLE DATE of 12/26 in order to be considered an "owner".


Oh the webs we weave!!

[GregWeld]

Was poking around my Schwab account this morning... and stumbled across this. I'm a shareholder in British Petroleum Prudhoe Bay Royalty Trust (BPT).


So what I want you all to LEARN is to read this statement and tell me what the key information is that you need to KNOW if you want to buy a stock and pick up the current dividend.


Regular Dividend of $2.5278 went Ex: BPT began trading ex-dividend today, payable to shareholders of record as of 01/15/2014.


Could you buy that stock today and get the dividend?


What does the "SHAREHOLDERS OF RECORD" mean?


What does the "EX" mean?


What do you think the price per share will do today given that it went "EX"?


The devil is in the details!

[SSLance]

Originally Posted by GregWeld

Could you buy that stock today and get the dividend?


What does the "SHAREHOLDERS OF RECORD" mean?

No... Because it will take at least 2 business days between the trade date and the settlement date.

To be a "Shareholder of record" means that you actually own shares of the company on their record, which doesn't happen until the settlement date.