BT.A woes

[Arborbridge]

The "head" argument is in favour of buying XD, especially if you may pay tax on the dividend. But in practice, I notice the correlation isn't always predictable, so, it is sometimes only theoretical.

The "heart" argument is that it's nice to capture an extra dividend. THere's also another factor which I think Ian and myself appreciate - it can act as a tie-breaker discipline if there are two or more shares you are thinking of buying with similar merit. Go for the one with the dividend being paid.

I used always to do this some years back - the XD date would become a hunting ground. However, as Ian says, it's not as though we are talking of millions here, so in the end (as my HYP grew and additions were less significant) I've more or less forgotten about the whole debate. Nowadays, I just look for the best share and take it as it comes, either X or C. In the long run, I would never notice the difference.

More importantly: buy on the dips

Arb.

[kempiejon]

I like to buy when I have the money, dividend dates being mostly irrelevant, however dividend drag when buying XD does make a small impact on the first year's annual yield. If there was nothing else to distinguish (when is that ever really the case) I might chose to buy the soonest XD share to see the income rolling in, much like all else being equal I'd prefer quarterly to bi annual dividends, but that's for the small psychological win seeing my income flow increase. I do measure my income monthly and have a rolling 12 month figure and a magic number as a target. Other times I might let dates influence my purchases, again all else being equal, would be shares paying out in December, January or April as they are my leanest income months. I wouldn't chose a lower yield to get an April dividend mind you and do understand that this is not affecting my wealth but it makes me feel nice.

[Arborbridge]

all else being equal I'd prefer quarterly to bi annual dividends,

So do I, but the downside is twice as much in the way of data entry - if you are recording stuff - so I have slightly mixed feelings. In recent years, I've been enjoying fewer, but bigger, dividends by consolidating holdings from different brokers, and that has led to a great reduction in effort. Likewise. I've been trying to reducing the number of holdings overall - but just shot myself in the foot by buying an extra one, Pennon

[idpickering]

all else being equal I'd prefer quarterly to bi annual dividends,

So do I, but the downside is twice as much in the way of data entry - if you are recording stuff - so I have slightly mixed feelings. In recent years, I've been enjoying fewer, but bigger, dividends by consolidating holdings from different brokers, and that has led to a great reduction in effort. Likewise. I've been trying to reducing the number of holdings overall - but just shot myself in the foot by buying an extra one, Pennon

Hi Arb. I keep a record of all my divends paid via an excellent spread sheet . It is nice to see that income rising over the years I've been hyping.

Regards,

Ian

[idpickering]

Damn autocorrect. I obviously meant excel sheet. Lol

Edited just in case it offends, but I know what you mean. Raptor.

[kempiejon]

all else being equal I'd prefer quarterly to bi annual dividends,

So do I, but the downside is twice as much in the way of data entry - if you are recording stuff - so I have slightly mixed feelings. In recent years, I've been enjoying fewer, but bigger, dividends by consolidating holdings from different brokers, and that has led to a great reduction in effort. Likewise. I've been trying to reducing the number of holdings overall - but just shot myself in the foot by buying an extra one, Pennon

I don't find recording a problem but take the point. I already have an above average number of shares in my HYP and other strategies so I do a bit of admin.
Pennon, as I've said in other threads, has a better commitment to inflation busting dividends 4% + RPI until 2020.

[StepOne]

I disregard the dividend payment date. If I decide to buy, I buy. As Leither says, the cum dividend should be included in the price anyway, although it does not always work out that way.

==============================

Absolutely .

All other things being equal , and there is no way of knowing which way they wont be equal , buying cd /xd makes no difference to the outcome.

.

It can make a difference. If a share is going ex-dividend tomorrow, for a final dividend worth, say, 2.5% of the share price, and you think you are going to hold the share for more than 40 years, then you would be better off buying tomorrow, not today (all other things being equal!). In fact it's probably considerably less than 40 years if you assume the dividend payout is going to be rising.

StepOne

[fisher]

Also - presuming the simple case where the share price drops by the amount of the dividend on ex-dividend day, you would be better to buy on ex-dividend day and save yourself the stamp duty on the amount of the dividend.

[Gengulphus]

Also - presuming the simple case where the share price drops by the amount of the dividend on ex-dividend day, you would be better to buy on ex-dividend day and save yourself the stamp duty on the amount of the dividend.

Indeed, but on say a £2,000 purchase with a pretty big 4% final dividend coming, the dividend is £80 and the stamp duty on it 40p. That's pretty close to the top of the range of savings for that size purchase, and in most cases, the potential saving will be nothing at all because you're nowhere near an ex-dividend day when you think to purchase. So the average saving per time you look up the ex-dividend date is probably under 10p - which means that unless you're very quick at looking up ex-dividend dates and making the purchase decision based on them, it's likely to be an activity that is remunerated at well under the minimum wage!

In short, surely one can find something more rewarding to do with one's time?

Gengulphus

[77ss]

The "head" argument is in favour of buying XD

In my view, the 'head' argument is is favour of disregarding dividend dates when buying.

Surely there are much more inportant considerations.

[Leither]

In short, surely one can find something more rewarding to do with one's time?

Gengulphus

Sorry but that's not really the point under discussion which started when a poster said something along the lines about wanting to buy BT cum div, later this month, whereas I suggested that it was better to buy ex div, ie more shares for you money.

Regards,

Leither.