Avoid the Dividend capture strategy…
It isn’t as easy as it sounds. If you are not familiar how it works, you buy a stock right before the ex-dividend date to capture the dividend, then sell it right after. Sounds like a quick win, right? But here’s the kicker: stock prices tend to drop by the dividend amount on the ex-dividend date, and sometimes even more due to market factors or volatility. So, that “quick win” can get wiped out by transaction fees, taxes, and market fluctuations.
Basically, you’re playing a risky game with short-term gains that will almost undoubtedly not beat the long-term strategy of holding solid dividend stocks for consistent income. Even more regretful is missing out on the compounding effect of the income that you can drip back into the stock, potentially increasing your long-term income. See our Compound dividend income calculator for insight.
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