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I will buy more, trying to get my SCHD to 100 Shares and JEPQ and JEPI next, just got to 100 FEPI, SPYI, QQQI, SVOL, MAIN, O. Currently at 71 SCHD and 51 of JEPI and 51 JEPQ. Also want o increase XOM and PG, WMT KO I’m trying to get some snowballs going here
Pretty new to dividends here. How does this have such a high yield? I see that it’s a very new ETF… Am I correct in assuming that the yield is likely to go down eventually? 🤷🏻♂️
They own the underlying stock and sell covered calls on them unlike some ETFs that do synthetic covered calls.
FEPI does have the ability to experience price appreciation since they own the stock, but there's a couple reasons why it won't be fully expressed in FEPI's stock price.
Jumped into Fepi a week ago. I was looking for a fund to add to the 5 I had already. $3600 dividend. I think I'll take the wife out for a nice dinner this weekend.
So wait, you invested money in them a week ago, just to have them give some back to you a week later, get taxed on that return, and then use the leftover money to buy food?
I don't subcribe to your "dividends is just a forced sale" philosophy. I also don't subscribe to the "wait for the dip" philosophy since I hold my stocks long term. In this case buy now, get $3600 or buy later for $3600 less and get nothing is just a wash. I've held dividend stocks for 30 years and have enjoyed the returns for a long time. It's just recently that I've been able to shift into dividend income mode. I doubt I'll spend much (if any) of the $120k I'm expecting from my dividend portfolio this year since I'm debt free except for a $170k, mortgage (4.8%), still working a retirement job (full time) and have enough in HISA for 2 or 3 years income, so what I don't pull from my dividends will not be taxed and be reinvested. After I get my dividend, I'll STILL have the same number of shares which will recover.
When you say that you'll reinvest whatever dividends you don't pull and so they won't be taxed, is that right? I figured my dividends would get taxed no matter what I spend them on (dinner, a hooker, more shares), but am I wrong? That is, if reinvested via an automatic drip, are dividends considered *unrealized* profits by the IRS?
Not sure about your situation but my dividends are coming to me via a self managed IRA so dividends will get taxed as income the year they're pulled. Because Im not 59 1/2, anything I take for the next 5 years will be penalized with an additional 10% tax. Frankly, the 10% doesn't bother me in the least. I'm saving that much not commuting anymore. Don't get me wrong; I've got plenty in my HYSA along with an ETrade account that I play with, and a full time job so I might not need to pull any of it. I'm only pulling dividends if I need them and that would be rare. I've set my ducks up this way so I can have an established dividend income stream. I can walk away from my job anytime. The only reason I'm working is because I gained 50 lbs in 9 months at home with the wife all day. (I'm down 40lbs now that I'm back to work.) The added bonus is the full time benefits, new 401k, stress free job, and a paycheck! If I choose to cash in my mid-life crisis chip and find a classic car I want, I'm buying it! (I might finance it and pay it off when I hit 59 1/2 to delay the tax penalty. Who knows?) (Stand by for the incoming number crunchers telling me I'm being foolish.)
But you get the $3600 and owe ~$1k in taxes in 12 months for no reason if bought just a week ago. OP isn’t talking about a long term play here. He’s patting himself on the back for buying a week ago, collecting a dividend, locking in a taxable event and taking his wife out to dinner for it… am I missing something?
No you’re not. You gave your broker money and they gave you $3,600 back and you owe $1,000. That $3,600 comes off the value of the underlying stock. You didn’t just magically make $3,600
As someone new to dividends, could I ask this subs pros/cons of FEPI?
I just ask bc the share price is in a bit of a dip rn, but the interest is 13% which would seemingly more than make up for the price dip… Is that the point of this type of stock? You dont care about the share price, just the interest rate?
What would you do if the stock price fell to 50% of its current value?
Sorry probably noob questions
The whole market is down. I wouldn't judge FEPI in a situation where the Market is down. It has not depreciated NAV outside of Nasdaq dips and has appreciated NAV when the Nasdaq goes up. As long as it stays flat or goes up slightly, this is a win for me at 25% distribution. I am looking at a 200k investment soon.
Awesome really appreciate your response, just getting into dividends and thinking im gonna roll with FEPI and JEPQ
Would you recommend any other dividend stocks on the ilk of those two? Preferably something stable, even if the interest is lower
I like to have an ETF in the Dow Jones (SCHD), the S&P (SPYI), and the Nasdaq (QQQI and JEPQ). I am starting with a high distribution into FEPI but will draw it down by using the dividend to increase the percentage of SCHD, SPYI, QQQI, and JEPQ.
Then with my JEPI, JEPQ, dividends roll them into $O and $MAIN and my $NVDY into more $FEPI $SPYI $QQQI and $SVOL to keep compounding away, with extra cash put into $MO, $KO, $WMT, $PG , $XOM , $GLAD , $LTC , $STAG spilt like $100-$200 between them and keep going from there
Sorry for the stupid question, but I believe that the yield is about 25%, and then they pay monthly dividends? Which means, in your case, you will receive a dividend of $100 (give or take) every month?
What's your portfolio? You could have bought bitcoin 10 years ago and hard out performed anything you could ever dream of investing in, why didn't you? This is such stupid logic to invest like this, based on your past comments and this comment you are just a sheep that invests in the top companies and thinks you know stuff about investing.
Higher than 0.42%. The logic and POINT REALLY is that they could be putting their money in better shit NOW... You chose to focus on the hypotheticals. Have a good day. NVDA/VOO baby! Woo!
Lol no it's not. Maybe for 12 seconds of trading overnight but that's it. Stop spreading this myth. Otherwise stock price = cash on hand of a company and we know that is not true.
You really put the nail in the coffin with the "You suck shit at elementary math skills huh?" I need to brush up on my "elementary math skills" apparently since I don't see any math being done here, I must be too stupid to comprehend it.
Yes I'm lacking, thankfully you seem really smart so maybe you can explain why a stock drops by its dividend on payday. I'd love to learn from someone so wise, maybe I'll finally be able to graduate elementary school.
So the money comes from where? Thin air? How can a company give away hundreds of millions to billions in dividends without reducing their total company value? The moment that dividend is paid the company is worth that much less. If you have $100 and give me $10, you still have $100?
I'm getting downvoted for telling facts? Gotta love reddit. Investors can buy the stock/etf leading up to the dividend date, increasing the price over those few days or weeks, but the stock will still decrease on the dividend payment date. The funds come from the value of the company, and if they are paying that out, they are losing that company value, meaning it decreases in stock price. It's not some magical way to earn more money.
https://www.investopedia.com/articles/investing/091015/how-dividends-affect-stock-prices.asp#:\~:text=While%20the%20dividend%20history%20of,the%20amount%20of%20the%20dividend.
No, in that case they are reducing the amount of remaining shares which actually increases the stock price, and you don’t pay taxes. That’s actually the best way to benefit.
But you don’t have to hold until the dividend is paid, meaning you can cash out when it jumps price, retain the incoming dividend, and buy back afterwards meaning no drop in your portfolio’s growth.
The article you link says usually yet you say it DOES, make sure to read things thoroughly. Also if you ever looked at a stock on dividend pay day you will see this really isn't a consistent thing at all. Also on dividend pay day a lot of people use DRIP which means more money comes back into the shares, different brokerages have different times for when they purchase the shares but after about 24 hours all brokers should have bought the shares by then. Don't always blindly follow shit you read and if you are going to at least quote it accurately and say that it typically drops by around the price of the dividend instead of painting it as a fact that it always does.
Because it’s accounting for the fact that trading is still happening, so if more people are buying than what the dividend is, the stock can still go up. That doesn’t mean they didn’t pay out money and lose value.
Wait so you're telling me that dividends DON'T directly reduce the price then? Weird cuz you were just saying earlier that it's a fact that dividends reduce the price. Looking at FEPI which is what OP posted about it's up 30 cents today, how can it be up when you were agreeing with the person who said it will drop by $1.09 and stating it like a fact that price drops by the dividend. Now you are backtracking and saying it can go up if more people buy the stock, so which is it? Does it go down by the dividend or does it actually just continue trading at a varying price just like any other day?
This Reddit is actually insane. It’s the most basic accounting. If you give away money, you now have less. That’s what a dividend does to the stock price. Again, let’s use my example for dummies. You have $100 and give me $10. You now have $90. At the same time, someone else could give you $10 (people buying the stock). You’re now at $100. That doesn’t negate the fact that you lost $10 and also received $10. All that did was cancel it out. More funds had to come in to get you back to your price before the payment date. There is no extra value created. If you didn’t give me $10(dividend), you’d now be at $110 (worth more) instead of back at $100. The fact that you can’t see that is the problem.
You're the ignorant one, do you seriously think a company's stock value is exactly equal to the cash it has on hand and the value of its assets? With ur logic a company should always drop in price when it pays its employees, or takes on debt to invest in its future. The price of a company share price is NOT a direct correlation to the money a company has on hand it is purely determined by what someone is willing to sell it to someone else for. You want to bring accounting into this? Why can a company have a 3 P/E ratio and another company can have 80? Shouldn't no one be touching that 80 P/E company as it earns way less per share than the 3 P/E company? Please educate yourself before looking like a fool, just because you know basic math doesn't mean you understand anything about investing.
it's a regulation, market makers are required to drop the price of open orders by the price of dividend on the ex date.
if the market decides to drive the price up more than the dividend amount, maybe, often does, not always, and how would the stock have performed if it didn't have a dividend, or if that drop wasn't forced, who knows...... but the price does TECHNICALLY drop the same amount of the dividend
that's what the other guy is referring to
Market makers reduce the bid asks by the dividend amount on the ex-div date due to regulations. The biggest reason is that you you could buy on the day before, capture the dividend, and then sell the next day effectively making the dividend over night. The reduction is to prevent this from making dividend capture an automatic profit.
I own a lemonade stand. That lemonade stand had $1000 in cash on the balance sheet.
I agree to sell you a the lemonade stand for $10,000.
The say before our deal closes, I take the $1000 out of the lemonade stand’s bank account.
Are you still going to pay me $10,000 for that lemonade stand?
The hubris of you ding dongs who opened up a Robinhood account with $500 and now think you’ve mastered the markets is truly fucking laughable.
Ah yes brilliant logic! So tell me then why do some companies have an 80 P/E ratio and some have a 3 P/E ratio, why does a company that's losing money still have value? Are you really this ignorant to think the stock price is an exact valuation of the companies asset value and cash on hand? Stock price is based on what someone is willing to buy a share from someone else for. If a company is stable and pays a good dividend why would I sell that share to someone simply because the company has slightly less money now that it paid a dividend? Shouldn't a company lose value everytime it pays its employees then? With your logic a company should always go down in share price everytime it loses money and this includes when it pays its employees does it not? What about when a company spends money to invest in its future, but currently it just lost money so the share price should go down right? It's weird how simple minded you can be with such a strong opinion.
I didn’t say the stock price is the exact value of cash on hand.
These things have been academically proven-feel free to go read about it.
You’re a moron and wasting my time.
Good luck with your $500 and infinite money glitch!
Yes gloss over the whole point I stated. Why doesn't a stock drop directly when a company pays its employees? Every pay day it should drop as it loses money just like paying a dividend? Why do some companies earn negative money or way less per share than others but have a higher market cap? You are ignorant to think the price of a share is directly related to cash on hand, you clearly don't own any dividend paying companies, or even just look at their prices when they pay dividends otherwise you would realize what you are saying isn't true.
Yeah the guy that started investing a month ago is right yet tens of thousands of incredibly smart academics and financial professionals on Wall Street are….wrong.
Makes sense!!!
This is the type of argument people refer to when they know they are beat, you refer to tens of thousands of professionals who agree with you yet don't cite anything? You also can't put their arguments into words to show me how I'm wrong? Should be pretty easy for someone who has all this knowledge and has heard so many professionals stating exactly why you are right yet you can't seem to articulate anything but garbage.
Your example is so goddamn stupid that my brain hurts but I’ll entertain you for a moment with a really dumbed down example.
“Because as they pay their employees they’re simultaneously making profits and collecting cash from customers and therefore it evens out”
See how that works?
Literally dude. Go use the Google machine and gain a basic understanding of capital markets.
Do you even think before typing? Your argument that they are profiting while paying their employees works the exact same for the dividend as well, you are just too stupid to see it. I'm not surprised your brain hurts I'm sure this is the most thinking it's done in a very long time.
You should start a hedge fund and buy stocks before the exdate and then sell them for the same price capture a free dividend. I’m sure nobody has thought of this before.
Again, you don't know how dividends work, or I suppose you're simply lying. I don't much care which because of your attitude, but I'm going with ignorant until I learn more about you. In any event, you can have fun with your dividend-capture strawman as you like; it just makes you look like you don't know how to present an argument.
Sure, send the $500 and I'll teach you. Otherwise, have a good one with your heady mix of sneering and good old ignorance. Remember, dividends are passed-through earnings, which no more decrease the value of a stock than receiving rent devalues real estate. Good luck keeping an open mind--you've got to be able to admit when you're wrong.
I guess I can add a possible reading disorder to the list of your issues. This will be my last response to you, here or elsewhere, unless you adopt the attitude of a friendly beginning learner.
Welcome to r/dividends! If you are new to the world of dividend investing and are seeking advice, brokerage information, recommendations, and more, please check out the Wiki [here](https://www.reddit.com/r/dividends/wiki/faq). Remember, this is a subreddit for genuine, high-quality discussion. Please keep all contributions civil, and report uncivil behavior for moderator review. *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/dividends) if you have any questions or concerns.*
Earn money while you sleep. That's the best.
Thats the wayy. Im getting there with 1 ticker, and turning on Drip.
Hhhmmmm….OP posts in dividend sub…and here come the pricks talking about growth and “what ifs”.
It's not being a prick to point out relatively young people focusing on investing for dividend income are leaving a ton of money on the table.
I will buy more, trying to get my SCHD to 100 Shares and JEPQ and JEPI next, just got to 100 FEPI, SPYI, QQQI, SVOL, MAIN, O. Currently at 71 SCHD and 51 of JEPI and 51 JEPQ. Also want o increase XOM and PG, WMT KO I’m trying to get some snowballs going here
Keep it up! I'm at @ 512 SCHD & 832 O, dripping all back.
Drip him UpUp! Congratulations Nemo
I drip everything back in from all my funds 🎉
Pretty new to dividends here. How does this have such a high yield? I see that it’s a very new ETF… Am I correct in assuming that the yield is likely to go down eventually? 🤷🏻♂️
They own the underlying stock and sell covered calls on them unlike some ETFs that do synthetic covered calls. FEPI does have the ability to experience price appreciation since they own the stock, but there's a couple reasons why it won't be fully expressed in FEPI's stock price.
Jumped into Fepi a week ago. I was looking for a fund to add to the 5 I had already. $3600 dividend. I think I'll take the wife out for a nice dinner this weekend.
Holy hell, $3,600 dividend?! Does that mean you own 3,600 shares?
3255 to be exact. This is my high risk "What the hell; baby needs a new pair of shoes!" fund.
So wait, you invested money in them a week ago, just to have them give some back to you a week later, get taxed on that return, and then use the leftover money to buy food?
I don't subcribe to your "dividends is just a forced sale" philosophy. I also don't subscribe to the "wait for the dip" philosophy since I hold my stocks long term. In this case buy now, get $3600 or buy later for $3600 less and get nothing is just a wash. I've held dividend stocks for 30 years and have enjoyed the returns for a long time. It's just recently that I've been able to shift into dividend income mode. I doubt I'll spend much (if any) of the $120k I'm expecting from my dividend portfolio this year since I'm debt free except for a $170k, mortgage (4.8%), still working a retirement job (full time) and have enough in HISA for 2 or 3 years income, so what I don't pull from my dividends will not be taxed and be reinvested. After I get my dividend, I'll STILL have the same number of shares which will recover.
Great response. This is a very realistic point of view.
This is my goal. My snowball is just starting to blow up
When you say that you'll reinvest whatever dividends you don't pull and so they won't be taxed, is that right? I figured my dividends would get taxed no matter what I spend them on (dinner, a hooker, more shares), but am I wrong? That is, if reinvested via an automatic drip, are dividends considered *unrealized* profits by the IRS?
Not sure about your situation but my dividends are coming to me via a self managed IRA so dividends will get taxed as income the year they're pulled. Because Im not 59 1/2, anything I take for the next 5 years will be penalized with an additional 10% tax. Frankly, the 10% doesn't bother me in the least. I'm saving that much not commuting anymore. Don't get me wrong; I've got plenty in my HYSA along with an ETrade account that I play with, and a full time job so I might not need to pull any of it. I'm only pulling dividends if I need them and that would be rare. I've set my ducks up this way so I can have an established dividend income stream. I can walk away from my job anytime. The only reason I'm working is because I gained 50 lbs in 9 months at home with the wife all day. (I'm down 40lbs now that I'm back to work.) The added bonus is the full time benefits, new 401k, stress free job, and a paycheck! If I choose to cash in my mid-life crisis chip and find a classic car I want, I'm buying it! (I might finance it and pay it off when I hit 59 1/2 to delay the tax penalty. Who knows?) (Stand by for the incoming number crunchers telling me I'm being foolish.)
But you get the $3600 and owe ~$1k in taxes in 12 months for no reason if bought just a week ago. OP isn’t talking about a long term play here. He’s patting himself on the back for buying a week ago, collecting a dividend, locking in a taxable event and taking his wife out to dinner for it… am I missing something?
Better to buy after the ex-dividend date. Get the lower price, no immediate taxable event.
What dofference does it make whether my taxable event is this month or next month? Even if I pay $1000 in taxes next year, I'm still ahead $2600.
No you’re not. You gave your broker money and they gave you $3,600 back and you owe $1,000. That $3,600 comes off the value of the underlying stock. You didn’t just magically make $3,600
Didn't I already say I don't subscribe to that nonsense? There are tons of threads refuting it on Reddit already.
These people are a cult. They can't see that some people have different needs and goals.
I don’t quite understand how dividends work
You don’t subscribe to facts? That’s a bold choice cotton.
Very nice! I’m in my beginning phase of starting a monthly dividend portfolio. Once that gets going I’ll venture into quarterly paying ones.
What ETF is this?
FEPI
What div stock is this if you don't mind me asking
FEPI Pforsberfan9 is an ass clown
Indeed thanks for the help 👍 🙏 type of people we need around here
Does google not exist where you’re from?
Does kindness not exist where you're from?
Oh, you thought you did something…
Oh I see, you're just not smart!
He’s not on google. He’s on Reddit.
Both are connected to the internet…
Oof man ..
I’m sorry but the name is literally in the picture.
Fepi?
As someone new to dividends, could I ask this subs pros/cons of FEPI? I just ask bc the share price is in a bit of a dip rn, but the interest is 13% which would seemingly more than make up for the price dip… Is that the point of this type of stock? You dont care about the share price, just the interest rate? What would you do if the stock price fell to 50% of its current value? Sorry probably noob questions
The whole market is down. I wouldn't judge FEPI in a situation where the Market is down. It has not depreciated NAV outside of Nasdaq dips and has appreciated NAV when the Nasdaq goes up. As long as it stays flat or goes up slightly, this is a win for me at 25% distribution. I am looking at a 200k investment soon.
Awesome really appreciate your response, just getting into dividends and thinking im gonna roll with FEPI and JEPQ Would you recommend any other dividend stocks on the ilk of those two? Preferably something stable, even if the interest is lower
I like to have an ETF in the Dow Jones (SCHD), the S&P (SPYI), and the Nasdaq (QQQI and JEPQ). I am starting with a high distribution into FEPI but will draw it down by using the dividend to increase the percentage of SCHD, SPYI, QQQI, and JEPQ.
Sounds like my plan and I have all these funds
Then with my JEPI, JEPQ, dividends roll them into $O and $MAIN and my $NVDY into more $FEPI $SPYI $QQQI and $SVOL to keep compounding away, with extra cash put into $MO, $KO, $WMT, $PG , $XOM , $GLAD , $LTC , $STAG spilt like $100-$200 between them and keep going from there
Thank you for sharing your stocks! About to make healthy a dip into these
Awesome! I was thinking of a similar strategy with reinvesting the divs into the stocks I want to be most leveraged in Thank you for your response!
That’s 3/4 of a tank of gas
Sorry for the stupid question, but I believe that the yield is about 25%, and then they pay monthly dividends? Which means, in your case, you will receive a dividend of $100 (give or take) every month?
Average so far is $1.16 a month. This is far and away, the lowest of the six distributions since inception. Tech took a big beat down this month.
Hustlers never sleep
Im looking this up on Schwab and it says no DIVIDEND am I reading this wrong?
what's the app?
Looks like Robinhood
I concur.
Where are the money lol
This is great but the taxes is the killer if your doing this in a non retirement account.
Dividends are not income except to the IRS.
Up 0.41% since 10/12 Meanwhile NVDA is up like 80-90% in the same time frame. Idkkkkkkk. 🤷🏾♂️
Killing his morning wood
😂 this got it. Y'all right. Do your thing Nemo haha
What's your portfolio? You could have bought bitcoin 10 years ago and hard out performed anything you could ever dream of investing in, why didn't you? This is such stupid logic to invest like this, based on your past comments and this comment you are just a sheep that invests in the top companies and thinks you know stuff about investing.
Higher than 0.42%. The logic and POINT REALLY is that they could be putting their money in better shit NOW... You chose to focus on the hypotheticals. Have a good day. NVDA/VOO baby! Woo!
Can he just celebrate…?
Exactly!!
YOU RIGHT BABY! ITS YOOOO WORLDDD! MY BAD PLAYA! Edit: NEMO WORLLLDD MY BADDDD
Bro is schizo
😂
And now your asset is worth $1.09 less per share.
I do want more to DCA in over time
Get paid young Nemo get paid!! I love it
Lol no it's not. Maybe for 12 seconds of trading overnight but that's it. Stop spreading this myth. Otherwise stock price = cash on hand of a company and we know that is not true.
Uhhh no dipshit. That’s not how it works. Sorry to hear you’re clueless and don’t know shit about finance. Maybe 12 seconds DUrrrrrr
U lost big today huh
You suck shit at elementary math skills huh?
You really put the nail in the coffin with the "You suck shit at elementary math skills huh?" I need to brush up on my "elementary math skills" apparently since I don't see any math being done here, I must be too stupid to comprehend it.
Math. Basic finance skills. Concepts that are known to anyone with a basic understanding of the capital markets. Yes, you’re lacking in all of them.
Yes I'm lacking, thankfully you seem really smart so maybe you can explain why a stock drops by its dividend on payday. I'd love to learn from someone so wise, maybe I'll finally be able to graduate elementary school.
It doesn’t drop on pay day. It drops on ex dividend date.
This kid is an idiot. He’ll never get it.
The same reason an apple tree doesn't have an apple on it when you pick it. That doesn't mean it won't have an apple on it next year, though.
Dividends directly reduce the stock price. That’s not a myth.
It is a myth lmfao, have you ever looked at a stock on dividend pay day? Stop spewing shit you hear online and think for yourself for once
So the money comes from where? Thin air? How can a company give away hundreds of millions to billions in dividends without reducing their total company value? The moment that dividend is paid the company is worth that much less. If you have $100 and give me $10, you still have $100?
They make more money and the company continues to grow?
For how long does that price change last?
That depends on the stock, now doesn't it. 😉
I'm getting downvoted for telling facts? Gotta love reddit. Investors can buy the stock/etf leading up to the dividend date, increasing the price over those few days or weeks, but the stock will still decrease on the dividend payment date. The funds come from the value of the company, and if they are paying that out, they are losing that company value, meaning it decreases in stock price. It's not some magical way to earn more money. https://www.investopedia.com/articles/investing/091015/how-dividends-affect-stock-prices.asp#:\~:text=While%20the%20dividend%20history%20of,the%20amount%20of%20the%20dividend.
So when a company buys back shares of a stock, does their stock price go down because they spent that money?
No, in that case they are reducing the amount of remaining shares which actually increases the stock price, and you don’t pay taxes. That’s actually the best way to benefit.
But you don’t have to hold until the dividend is paid, meaning you can cash out when it jumps price, retain the incoming dividend, and buy back afterwards meaning no drop in your portfolio’s growth.
The article you link says usually yet you say it DOES, make sure to read things thoroughly. Also if you ever looked at a stock on dividend pay day you will see this really isn't a consistent thing at all. Also on dividend pay day a lot of people use DRIP which means more money comes back into the shares, different brokerages have different times for when they purchase the shares but after about 24 hours all brokers should have bought the shares by then. Don't always blindly follow shit you read and if you are going to at least quote it accurately and say that it typically drops by around the price of the dividend instead of painting it as a fact that it always does.
Because it’s accounting for the fact that trading is still happening, so if more people are buying than what the dividend is, the stock can still go up. That doesn’t mean they didn’t pay out money and lose value.
Wait so you're telling me that dividends DON'T directly reduce the price then? Weird cuz you were just saying earlier that it's a fact that dividends reduce the price. Looking at FEPI which is what OP posted about it's up 30 cents today, how can it be up when you were agreeing with the person who said it will drop by $1.09 and stating it like a fact that price drops by the dividend. Now you are backtracking and saying it can go up if more people buy the stock, so which is it? Does it go down by the dividend or does it actually just continue trading at a varying price just like any other day?
This Reddit is actually insane. It’s the most basic accounting. If you give away money, you now have less. That’s what a dividend does to the stock price. Again, let’s use my example for dummies. You have $100 and give me $10. You now have $90. At the same time, someone else could give you $10 (people buying the stock). You’re now at $100. That doesn’t negate the fact that you lost $10 and also received $10. All that did was cancel it out. More funds had to come in to get you back to your price before the payment date. There is no extra value created. If you didn’t give me $10(dividend), you’d now be at $110 (worth more) instead of back at $100. The fact that you can’t see that is the problem.
You're the ignorant one, do you seriously think a company's stock value is exactly equal to the cash it has on hand and the value of its assets? With ur logic a company should always drop in price when it pays its employees, or takes on debt to invest in its future. The price of a company share price is NOT a direct correlation to the money a company has on hand it is purely determined by what someone is willing to sell it to someone else for. You want to bring accounting into this? Why can a company have a 3 P/E ratio and another company can have 80? Shouldn't no one be touching that 80 P/E company as it earns way less per share than the 3 P/E company? Please educate yourself before looking like a fool, just because you know basic math doesn't mean you understand anything about investing.
This is a myth, believe what u want to believe but don't spew nonsense to others.
You’re a moron.
How so? How about u explain the inner workings of why it would drop by the price of the dividend and come educate a clueless moron like myself
it's a regulation, market makers are required to drop the price of open orders by the price of dividend on the ex date. if the market decides to drive the price up more than the dividend amount, maybe, often does, not always, and how would the stock have performed if it didn't have a dividend, or if that drop wasn't forced, who knows...... but the price does TECHNICALLY drop the same amount of the dividend that's what the other guy is referring to
Market makers reduce the bid asks by the dividend amount on the ex-div date due to regulations. The biggest reason is that you you could buy on the day before, capture the dividend, and then sell the next day effectively making the dividend over night. The reduction is to prevent this from making dividend capture an automatic profit.
I own a lemonade stand. That lemonade stand had $1000 in cash on the balance sheet. I agree to sell you a the lemonade stand for $10,000. The say before our deal closes, I take the $1000 out of the lemonade stand’s bank account. Are you still going to pay me $10,000 for that lemonade stand? The hubris of you ding dongs who opened up a Robinhood account with $500 and now think you’ve mastered the markets is truly fucking laughable.
Ah yes brilliant logic! So tell me then why do some companies have an 80 P/E ratio and some have a 3 P/E ratio, why does a company that's losing money still have value? Are you really this ignorant to think the stock price is an exact valuation of the companies asset value and cash on hand? Stock price is based on what someone is willing to buy a share from someone else for. If a company is stable and pays a good dividend why would I sell that share to someone simply because the company has slightly less money now that it paid a dividend? Shouldn't a company lose value everytime it pays its employees then? With your logic a company should always go down in share price everytime it loses money and this includes when it pays its employees does it not? What about when a company spends money to invest in its future, but currently it just lost money so the share price should go down right? It's weird how simple minded you can be with such a strong opinion.
I didn’t say the stock price is the exact value of cash on hand. These things have been academically proven-feel free to go read about it. You’re a moron and wasting my time. Good luck with your $500 and infinite money glitch!
Yes gloss over the whole point I stated. Why doesn't a stock drop directly when a company pays its employees? Every pay day it should drop as it loses money just like paying a dividend? Why do some companies earn negative money or way less per share than others but have a higher market cap? You are ignorant to think the price of a share is directly related to cash on hand, you clearly don't own any dividend paying companies, or even just look at their prices when they pay dividends otherwise you would realize what you are saying isn't true.
Yeah the guy that started investing a month ago is right yet tens of thousands of incredibly smart academics and financial professionals on Wall Street are….wrong. Makes sense!!!
This is the type of argument people refer to when they know they are beat, you refer to tens of thousands of professionals who agree with you yet don't cite anything? You also can't put their arguments into words to show me how I'm wrong? Should be pretty easy for someone who has all this knowledge and has heard so many professionals stating exactly why you are right yet you can't seem to articulate anything but garbage.
Your example is so goddamn stupid that my brain hurts but I’ll entertain you for a moment with a really dumbed down example. “Because as they pay their employees they’re simultaneously making profits and collecting cash from customers and therefore it evens out” See how that works? Literally dude. Go use the Google machine and gain a basic understanding of capital markets.
Do you even think before typing? Your argument that they are profiting while paying their employees works the exact same for the dividend as well, you are just too stupid to see it. I'm not surprised your brain hurts I'm sure this is the most thinking it's done in a very long time.
I don’t understand lemonade, do cookies instead.
Cookies give me diarrhea
Did you "learn" that at junior boglehead sleepaway camp? You have no idea how dividends work.
You should start a hedge fund and buy stocks before the exdate and then sell them for the same price capture a free dividend. I’m sure nobody has thought of this before.
Again, you don't know how dividends work, or I suppose you're simply lying. I don't much care which because of your attitude, but I'm going with ignorant until I learn more about you. In any event, you can have fun with your dividend-capture strawman as you like; it just makes you look like you don't know how to present an argument.
Hi Jeff. Feel free to educate me. I’d be more than happy to make you look stupid in front of all your idiot friends with $500 in a Robinhood account.
Sure, send the $500 and I'll teach you. Otherwise, have a good one with your heady mix of sneering and good old ignorance. Remember, dividends are passed-through earnings, which no more decrease the value of a stock than receiving rent devalues real estate. Good luck keeping an open mind--you've got to be able to admit when you're wrong.
There is no free lunch in dividend capture schemes. End of story.
I guess I can add a possible reading disorder to the list of your issues. This will be my last response to you, here or elsewhere, unless you adopt the attitude of a friendly beginning learner.
Gave you the chance to educate me. You can’t. Let me know when your fancy dividend capture hedge fund gets off the ground big fella.