In that case, I'll have to re-evaluate my reasoning. I think the base of it still holds, but now if I buy stock right before the ex date, I'll be buying it at local maxima point. On the other hand, if I buy it right after the payout, it will be lower, but then I won't see any return for more time.
I see, that's good to know. So it sounds like when the dividend is paid out, stock price falls accordingly to the total amount paid and thus the amount of money that has left the company, then the stock price rises slowly as the company replenishes those funds throughout the quarter?
I'm not sure I follow. If I buy the stock for $100, wait for the dividend of $4, then at that time, sell it for $100 (assuming it's still that price, could be higher or lower), I'll end up with $104 in cash.
BrandonQuinnDixon OP t1_j2en1c8 wrote
Reply to comment by nkyguy1988 in Question about dividend re-investment strategy by BrandonQuinnDixon
In that case, I'll have to re-evaluate my reasoning. I think the base of it still holds, but now if I buy stock right before the ex date, I'll be buying it at local maxima point. On the other hand, if I buy it right after the payout, it will be lower, but then I won't see any return for more time.