Investing - Theory, News & General • Re: What individual stock has produced the greatest amount of cumulative dividends for you?

Just remember that when stock dividends are paid the price goes down, such that you have the same amount of money after the dividend as before. You can also sell shares of one stock to buy shares of another stock, you don’t have to wait for dividends.

I am reading that the price does not always drop. Also, stocks drop everyday, then the go back up, whats the issue? You get paid and still have the same number of shares unlike selling shares. In general, high quality dividend stocks are more stable. FYI I am retired so dividends have some value to me. If I was 30, I would not want dividends, I would want total return. I am in both SCHD and VTI/VOO, using SCHD and BND to pay my monthly bills and VTI/VOO for higher return.

The daily fluctuations of a stock are separate from the dividend-induced price drop. The price has to drop due to a dividend payment, otherwise someone could make money by buying and selling appropriately right before and after the dividend. And that buying and selling would cause the price to drop the appropriate amount, such that no one can profit from the payment of the dividend.

Another way to look at it is why wouldn’t the price drop if a company removes $100M from its bank account and distributes it to shareholders? Isn’t the company worth $100M less than it was just before the dividend? The market is efficient and should price that payment appropriately. Of course, other news causes the price to also fluctuate, beyond the dividend payment.

Point is stock prices do not continually go up, so a price drop is inconsequential to the overall picture.

Yes, the daily fluctuation in prices of stocks is around 1%-2%. A 4% dividend paid quarterly is a 1% fluctuation when paid.

But the important point is your first paragraph, which is that you don't get extra money by somehow collecting dividends.

Statistics: Posted by LaramieWind — Thu Jul 25, 2024 8:41 am