Dividend Issue

[dshe]

Hi,

I am new to this forum. I do share investing in a small way. i have one question on dividends

Is it better to Sell shares prior to ex-dividend date and take the profit or wait and take the dividend (partially or fully franked).I am assuming that the share price will fall after the ex-dividend date by the same value.

Fom tax point of view if i was a) low income earner b) high income earener

Which is the better option

thanking in advance
daya

 

[markor]

tax point of view...

Bit risky asking that here.

Markor

 

[RodC]

daya,

I like to hold on and get the dividend and the franking credits, because that's what suits me. You really need to evaluate your own situation.

Even though the share prices usually fall by an amount equivalent to the dividend, this is often (but not always) regained within a week or so.

regards,

Rod.

 

[Mofra]

Dshe,

I've generally found that if a stock issues a franked dividend the stock doesn't fall by the full amt of divvie plus franking credits, ie a dividend of say 15c and franking credits of 5c, theoretically the stock should drop by 20c when it goes ex-divvie but often doesn't. Of course, external factors also act upon a stock that goes ex-dividend but if you check the chart history for many of the blue chips you'll find they often make up the dividend gap in a relatively short period of time (15 - 20 trading periods), especially in a bull or sideways trending broader market