Dividend capture is one of the traditional investment strategies. Investors buy the stock before it goes ex-dividend and hold for at least 61 days that is the minimum time required for a dividend to be taxed at the reduced 15% rate, and collect the dividends,  then you could sell it in order to make a small capital gain hopefully.

This strategy generally works well when it’s a one-time special dividend.  But please note that modification will be required depends on the types of security and dividend.

1) One-time bonus

One time bonus can be obtained by special dividend. Special dividend is not continuous, and it takes more than a few weeks for price to retrieve.

2) Continuous income

So many fixed income securities like preferred stocks, corporate bonds, trust preferred securities and others are listed on major stock exchanges that you can obtain continuous income by holding some of these.

3) Income and capital appreciation

Some common stocks like REITs, royalty trusts, CEFs(Closed-End-Funds)and others give you continuous income opportunities and even capital appreciation.




Dividend related special techniques

1) Short-term transactions

2) Sell short special dividend stocks

3) Arbitrage





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