PreMarket Prep Breaks Down The Dividend Capture Strategy

Investors can use utilize many different strategies to make money in the stock market. Some are sexier than others, but require more risk, so it really depends on your account size and risk tolerance.

Timing, Ability To Hold Position: The Dividend Capture Strategy isn't often discussed. This referes to purchasing a stock prior to its ex-dividend date, then selling it at a later date.

Keep in mind that it may not necessarily be the next day and will require the proper margin to hold on to the position in your portfolio.

It's Used By Small And Large Investors: This strategy has been in use for several years and some investors, even some large or institutional investors, rely heavily on it. Those investors will closely follow the behavior of the issue between dividend payouts. Many will attempt to fine-tune their entries by using technical analysis.

Patience And Repetition: More importantly, there is no 100% guarantee that every instance this strategy is used will work out in your favor. Therefore, applying it to multiple stocks over the course of time is required in order for a positive return.

Caution: Stocks that are in the news and volatile or may be in play may not be good candidates for the strategy.

The strategy was discussed at length on Tuesday’s PreMarket Prep broadcast, and several stocks that are commonly used for this strategy were covered.

The discussion on this strategy can be found here: