Pattern na sa price action ng dividend stocks ang pag taas ng price upon announcement ng dividend payout and ang pag dip on or after ex date. Is it feasible to take advantage of this pattern?
Case study: LTG
Budget: 100,000
Aug 30, 2022
Case study: MREIT
BP: 100,000
Aug 16, 2022
Hindi considered yung taxes and commissions pero at face value, from an initial seed of 100,000, it is possible to take huge profits or grow your shares by repeating the process of selling one day before ex date and buying back on the ex date. Yes, there will be losses (huge) but you will be able to recover at some point but still grow your holdings (as for the case of MREIT).
Riskier sya compared sa Cost Averaging pero with this approach, one time lang yung paglabas mo ng pera BUT you have the option to skip selling and take the dividends instead. And if you look into the bigger picture, parang PCA lang din ito.
Of course, lahat ng ito ay hindsight and no one can really predict the price action accurately but isn't that the same for cost averaging? So bakit walang strategy centered sa ganito? If meron, bakit hindi sya popular? Ano ang problem sa approach na to?
edit: formatting
Case study: LTG
Budget: 100,000
Aug 30, 2022
- Buy: 11200 * 8.8/share = 98,560
- Total buying power: 1440
- Ex Date: Dec 01, 2022
- Supposed dividends: 11200 * 0.5 = 5600
- Sell: 11200 * 9.4 = 105, 280
- Total bp: 106,720
- Buy: 11900 * 8.9 = 105,910
- Total bp: 810
- Ex date: March 01, 2023
- Supposed div: 11900 * 0.3 = 3570
- Sell: 11900 * 10.5 = 124,950
- Total bp: 125,760
- Buy: 12300 * 10.2 = 125,460
- Total bp: 300
- Ex date: May 25, 2023
- Supposed div: 12300 * 0.3 = 3690
- Sell: 12300 * 10.5(projected) = 129,150
- Total bp: 129,400
- Buy: 13000 * 9.9(projected) = 128,700
- Total bp: 700
- projected profit: 29,400; or
- growth of shares: 11,200 to 13000
Case study: MREIT
BP: 100,000
Aug 16, 2022
- Buy: 6200 x 15.95 = 98,580
- Total bp: 1420
- Ex date: Nov 22, 2022
- Suppose div = 6200 * 0.2444 = 1515.28
- Sell: 6200 * 11.85 = 73,470
- Total bp: 74, 990
- Buy: 6400 * 11.62 = 74, 368
- Tbp: 622
- Ex date: Jan 19, 2023
- supposed div: 6400 * 0.2428 = 1553.92
- Sell: 6400 x 15.21 = 97,344
- Tbp: 97966
- Buy: 6600 x 14.7 = 97020
- Tbp: 946
- Ex date: May 24, 2023
- Supposed div: 6600 * 0.2476 = 1634.16
- Sell: 6600 x 14.94(projected) = 98604
- Tbp: 99,550
- Buy: 6700 x 14.64(projected) = 98,088
- Tbp: 1462
- projected profit: -450; or
- growth of shares: 6200 to 6700
Hindi considered yung taxes and commissions pero at face value, from an initial seed of 100,000, it is possible to take huge profits or grow your shares by repeating the process of selling one day before ex date and buying back on the ex date. Yes, there will be losses (huge) but you will be able to recover at some point but still grow your holdings (as for the case of MREIT).
Riskier sya compared sa Cost Averaging pero with this approach, one time lang yung paglabas mo ng pera BUT you have the option to skip selling and take the dividends instead. And if you look into the bigger picture, parang PCA lang din ito.
Of course, lahat ng ito ay hindsight and no one can really predict the price action accurately but isn't that the same for cost averaging? So bakit walang strategy centered sa ganito? If meron, bakit hindi sya popular? Ano ang problem sa approach na to?
edit: formatting