New answers tagged dividends
3
Published dividend yield is calculated based on the current unit/share price and most recent annualized distribution. Your yield will change over time as you receive dividends.
Assuming you paid the current price of $41.68 per unit for your 100 units of SPYD, your cost basis is $4,168. If the distribution holds to the most recent paid of $0.6362/unit your ...
1
If this was a non-ETF fund then the transaction would have taken place at the end of the day. That would mean that all re-investment transactions that day would take place at the same price.
With an ETF the price could change every second of the trading day. Unless they took place at the same second the price could be different. On a particularly volatile ...
4
No, when you buy ETF shares you buy from some other holder on the market not from the issuer, and the same when the broker buys to reinvest a distribution (but they do a bulk transaction for all their clients which is more efficient). That's the difference between an ETF and a traditional fund; see Do ETFs move on their own? Or only on aggregate from the ...
-2
You can check this by looking at history.
There are many stocks that issued a percentage dividend and then did NOT drop by that percentage on the ex-dividend date.
The reasons why are many and various, but that's not what you asked.
3
Yes a stock will always drop by the amount of a dividend.
The reason that a stock drops after a dividend is because just before the ex-div date, that stock was worth its actual value plus the guaranteed dividend. If the objective value of a share is $90, and that share also provides $10 per share to its shareholders tomorrow, that company share will be ...
4
Yes a stock will on average drop by the amount of a dividend. The actual change can fluctuate during the day just based on normal market fluctuations. But things like market stop and limit orders will adjust automatically by the exchange by the exact amount of the dividend due to this effect.
The reason that a stock drops after a dividend is because it has ...
1
I recently heard that one way to retire is to accumulate enough wealth
and then invest in a high dividend portfolio. That way, you can live
off the dividends and not have to sell your stocks. So you don't have
to worry about outliving your assets, etc. I like the idea of this so
I could leave things to my children, charities, etc.
This is one way some ...
3
You are under the assumption that dividends are for free. But they are not. When a company pays out a billion to its shareholders via dividends, the value of the company will be reduced by that billion and this is reflected in the price.
Therefore it does not really make a difference whether you sell 2% of your stocks or get a 2% dividend. There is however a ...
1
You can have it both ways with dividend stocks: Automatically reinvest the dividends during your working career, which means higher growth for your personal portfolio. Then in retirement, switch off the automatic reinvestments and use the dividends as current income.
However, Warren Buffett advises amateur investors to just save as much as you can into a ...
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