I see no connection between purchases and dividends. Do as you think and can.
Incidentally, both companies are currently paying out dividends.
Incidentally, both companies are currently paying out dividends.
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3Mes
@7Trader It makes sense to buy strong dividend stocks after a dividend payout rather than before. This reduces your equity and you get more dividends for less capital next time. This definitely has an effect with German dividend stocks, because they usually only pay out once a year, but the full amount = the same price drop.
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3Mes
@HOCLN2 Your statement shows that you probably haven't done enough research into dividends. For example, how do I reduce my equity if the share is still higher? Dividends are only a part of the total return and according to the div irrelevance theory they don't matter. In terms of taxes and transaction costs, they are actually rather "harmful".
And very importantly, payday is not the same as ex-div date.
And very importantly, payday is not the same as ex-div date.
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3Mes
@TomBLN Based on your statement, you have probably never traded in dividends. If you buy after the ex-date and wait until the next ex-date, there is a good chance that the share price will A recover and B rise even higher than the last time before the ex-date. After all, the dividend amount is only adjusted at an Annual General Meeting based on the economic situation. Share prices usually result from the economic performance of a company, which would mean that if the dividends are increased, the company must also be doing well = higher share price. If you buy a few days before the ex-date, I will give you my word that you will be in the red for at least the dividend amount. If you buy after the ex-date, you will get lower equity + price gains (probably) + dividend, which is not yet fixed, but will probably be higher than last time.
So if Allianz pays me 5% at a share price of €100, but I buy after the ex-date at €95 and receive a 5% dividend (€5.25) in the following year at a share price of €105, I have a personal dividend of 5.53%. Accordingly, it makes a difference whether you buy before or after the ex-date or not.
So if Allianz pays me 5% at a share price of €100, but I buy after the ex-date at €95 and receive a 5% dividend (€5.25) in the following year at a share price of €105, I have a personal dividend of 5.53%. Accordingly, it makes a difference whether you buy before or after the ex-date or not.
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3Mes
@HOCLN2 phew I don't even know where to start... I don't think I have the nerve for this discussion today. Good luck with your investing!
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@TomBLN I have no argument, but feel free to correct me as to whether it is wise to buy shortly before the ex-date or afterwards. I'm curious to hear what you have to say.
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3Mes
@HOCLN2 To explain it very briefly and simply without APT, dividend relevance theory or the like: it makes no difference. :) unless there is a difference in taxation between capital appreciation and dividend distribution. But this does not exist in Germany.
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3Mes
@TomBLN I am familiar with the theory, but it has absolutely nothing to do with when you should buy. It only reflects whether it is better for a company not to pay dividends or not (if it is reinvested wisely, it is better not to pay dividends).
I also questioned myself and asked Dr. ChatGPT. ChatGPT comes to the same conclusion as me, whether it makes a difference to buy a dividend stock before or after the ex-date.
"Timing the purchase of a dividend stock in relation to the ex-dividend date can have different effects on your investment performance depending on your strategy and objectives.
Conclusion
Long-term: For a long-term investment and to reduce the purchase value, it may be more advantageous to buy the share after the ex-dividend date as you will receive it at a lower price."
I also questioned myself and asked Dr. ChatGPT. ChatGPT comes to the same conclusion as me, whether it makes a difference to buy a dividend stock before or after the ex-date.
"Timing the purchase of a dividend stock in relation to the ex-dividend date can have different effects on your investment performance depending on your strategy and objectives.
Conclusion
Long-term: For a long-term investment and to reduce the purchase value, it may be more advantageous to buy the share after the ex-dividend date as you will receive it at a lower price."
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3Mes
@HOCLN2 From a purely mathematical point of view, it fits, but it simply shouldn't make any difference to your investment decision whether before or after the ex-date. By the way, you have confused the theory. You are talking about capital allocation as a motivation for dividend distributions.
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3Mes
@7Trader I actually just wanted to confirm your comment that there is no direct correlation between the time of purchase and dividends. But then it got out of hand, yes. :)
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