Can I keep investing my whole portfolio in dividend stocks on the ex-dividend date?
Lets say I have 0,000 to invest in stocks. Since every company reports when their ex-dividend dates are, couldn’t I technically just invest all my money in a company right before the market closes the day before the ex-dividend day, then simply sell all my shares once the market opens again on the ex-dividend date and earn the dividend for all my shares? If I did this every single day for different stocks (since every day some company out there is paying dividends… at least during the quarters) , wouldn’t I be able to make a sufficient amount of money?
Could anyone tell me if this is a good strategy or if there is something I am missing that would prevent this from being successful?
Why is that a bad strategy? I understand that I will not get rich from it, but I do not see a way that I will ever lose money from it? Perhaps there is a better way out there to make even more money, but can you give me any explanation if it is possible to lose money this way?
My name is Katy and I am Hirby's Financial Guru with 20 years of experience and expertise in financial markets, insurance and tax strategies. I'm inspired by those who pursue their financial goals and I am here to help. 
My name is Tom and I am Hirby's Legal expert specializing in Real Estate and Injury Law. I have over 15 years of experience helping people online with legal advice and strategy.
October 24th, 2010 at 5:07 pm
It is not a good strategy. The opening price on the ex-dividend date is adjusted downward by the amount of the dividend paid and in many cases, may even open lower than that.
October 24th, 2010 at 5:07 pm
You could. But that’s the worst investment strategy I’ve ever read. Try reading about investing and dividends to discover why.
October 24th, 2010 at 5:07 pm
its not a good strategy because the opening price will be less by the amount of the dividend so you do not gain the dividend and everybody else is doing the same thing so by the time your order is processed to sell the shares, the price will likely have dropped even more than the dividend.
October 24th, 2010 at 5:07 pm
Also, I think you have to be a shareholder of record for a certain amount of time before the ex-dividend date. But buying and selling all those shares would probably result in commissions higher than your profits. Why not just invest in several dividend paying stocks, and reinvest your dividends automatically every year? Or an income mutual fund?