
Originally Posted by
evo34
If only it was that easy... When stocks pay a dividend, the price of that stock usually drops by the amount of the dividend (obviously, since the company no longer owns the cash it paid out, it is worth less). The last few 50-cent divs for NRZ have resulted in a ~50-cent share price drop overnight. So net zero gain. Actually, sometimes less than zero, since you owe tax on the dividend payment and may not be able to deduct the loss on the trade (if you lose more than $3k in a year).
Bottom line: chasing dividend ex-dates is anything but free money.