The ex-dividend date usually comes two days before the record date.
The dividend can only be collected by registered holders of the stock on a certain date, known as the record date. This is called the declaration date, and it is usually announced by a press release. The process begins with a company declaring the date it will pay its next dividend. Before getting into the details of how dividend capture works, you need to understand the terminology and sequence of events leading up to a dividend payment. What is this simple strategy that can boost dividends? It's called the dividend-capture strategy.Ī dividend capture involves purchasing a stock for its dividend, collecting the dividend, selling the stock, and then using the proceeds to buy another stock ready to pay a dividend. The best part is that the dividends still qualify for the 15% dividend tax rate. Instead of four quarterly dividend payments a year, investors can use this strategy to earn as many as six dividend payments.
#Dividend capture strategy plus
On the plus side, the rewards can be great - you can easily earn yields 50% higher than normal.īasically, this strategy enables investors to lock in two additional dividend payments each year for the same investment dollars. It's not hard, but it will require a little research. Savvy income investors have long known of a simple investment strategy that allows you to capture more dividends with the same investing dollars.
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