Dividend Harvesting Strategy ..

My guess is a lot within a site like this would have the characteristics going by some of the long running posts on different equity investment set-up's-- either stand alone or someone else having the control over your money..

Much the same as some can run faster-some are naturally slower ..

So the question is who ??within this site buys just prior to the half yearly results and interim dividends announcements -depending on the units numbers by x 1000 purchased a few weeks before the cut-off holding period and doing this on a individual basic can work out very well short-term..

Plus when you look at fixed terms rates from one month-six months -12 months that all Banks offer
I can understand why so many use this system in after tax dollar..

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You do have to be careful as the 45 day rule can apply to deny your franking credits if you only hold for a short period. This only kicks in if you are generating over $5k in franking credits though.

I have though about it on a small scale, but my concern would be whether the fluctuation in share price in the short period would negate the value of the dividend earned.

 

Usually the share price drops after the div recording date by at least the dividend amount. Sometimes more than that as a lot of sellers take profits along with the dividends.

 

Guilty.

Been doing this for years but mostly with one company.

Got burned in the end.... by capital losses.

Reminds of that song by Kenny R:

"You got to know when to hold 'em, know when to fold 'em,
Know when to walk away and know when to run.
You never count your money when you're sittin' at the table.
There'll be time enough for countin' when the dealin's done.

Now Ev'ry gambler knows that the secret to survivin'
Is knowin' what to throw away and knowing what to keep.
'Cause ev'ry hand's a winner and ev'ry hand's a loser,
And the best that you can hope for is to die in your sleep. "

 

Dividend stripping, including a strategy of using margin loan, has been going on for ages.

Does it work? Well, if it does the ones who can do it ain't telling. If it can be done - profitably and consistently - I reckon you'd also be able to rip bottle tops off with your teeth, assuming you still had any.

Since the 45 day rule (90 for preference shares) kicks in above 5k in franking, you'd have to wonder if it's even worth doing. All about numbers.

 

I sometimes do a dividend stripping strategy, of sorts. Usually selling the shares before the ex-div date. If you plan to buy and earn the div, an expected profit target can be determined. So, buying the shares about 6-8 weeks before the ex-div date, in the hope of a run up before going ex-div, and the target is reached, just sell out. Same profit, same tax applies just no franking and less risk. Do a Google search on The Chartist dividend momentum strategy, an aid to timing the entry.

 

Thanks,there are a few downsides it just comes down too the entry timing and exit range but I know a few that do this but they invest 300-500k each time on one ASX listed about this time of year and only target banks..

 

Son.... for a taste of you whisky and bumiming of a ciggie I will give you some advice...

Reminds of the Druids of The Druie...but none of the advice is worth takin/




Hope you found the Ace you could keep.... ...and no I don't mean one of your female friends from the Druie...