calling LITTLE WOMAN....

hi there, do you b/s high yeilders for divi income? i'd like to add this to my overall strategy but not sure if about timings...any advice?

all advice welcome.

t.

I never buy shares in companies paying dividends as I think the shares are
at a premium.
Opinions welcome.

Putting in a reply to this one to get it further up the board for you terod, as its a good question....If I see Little Woman around I'll draw her attention to your question.

Sorry, just been watching the auction... so not been paying much attention to the BB.........

I get a file every week, from the following e-mail address : itpaysdividends@itpaysdividends.co.uk - I pay something like 20pa for this service. The file provides lots of information about the FTSE100 & 350 companies, including the yield against Fridays closing prices, and also % the closing price is off it's 12 month low as well as high.

I go through this list, and highlight companies that fill the following criteria: Yield over 3.5% & closing price close to it's low. There are a few sectors I don't like so ignore those companies. I then research the company and try and work out why the share is close to it's low (The only reason I accept is that it's a poorly run company and then it will get cross off as a possiblility - I don't consider others opinions as a reason not to invest!)

I also check out when results are due, and ex div dates.(Research section on this site is pretty good for this). Sometimes I find a share that the results are already out and divi date is not for 2-3 weeks and the share is close to it's low.... Most shares go up in the 10 days before ex divi, so I'll sometimes buy, and sell out before the ex div date, because my profit is a lot more than the divi.....

With a FTSE100 share often the price drops as soon as it goes ex divi, but I often find it picks back up a couple of weeks later and I get out then. I rarely buy shares that are close to their highs!

Years ago I bought shares for the long term and the div became a important factor. I still have some Viridian shares purchased about 10 years ago. They are worth about 190% more than I paid, but I am expecting to get about a yield of 20% in the current tax year on the original cost. So you can understand why I just sit on them!

little woman - thanks for the info.

do you agree that it can be a profitable part of our overall trading strategy? i'd like to keep a percentage of my trading fund ready for ex-divi's. Croc site suggest that you can buy/sell within a v.shrt period (overnight as i understood it). you suggest it can take a week or so.

also, are the record dates you work to accurate? I assume i'd need to buy 48hrs in advance to ensure i'm on the books, please correct me here is needbe.

just wanting to make sure i 'get it right' from the off.

cheers.

t.

Yes, if part of your portfolio is producing a return without you doing anything that must be a good thing. I am forever keeping my options open and tweaking my strategy depending on whats happening out there, and how much time I have! If I can make a reasonable profit and only hold a share for a few hours I will. If it takes longer so be it - and in some cases the div will keep me happy.

I'm a great believer in spreading risk by holding different shares for different reasons (or not holding in some cases)!

To ensure you get the div you need to purchase the share before close on Tues, as ex div is wed on open. Anyone on the books on close of the Tues will be on the books 3 days later (the record date) so as long you hold them at that moment you get the div. But you could end up paying over the odds as very few shares are cheap just before the ex div date. You can sell after open and still get the div. (Thats why so many shares drop! But watch it if you put a stop loss in place as many have been caught out with this when the price drops and really lost out big time!)

Trading is not straightforward, and you need to be on the look out for opportunities. Some will be quick, and others will take longer to bear fruit! Its all about having fun and if you can make some money along the way thats a plus!

I've told this story before, so if you've already read this I'm sorry to repeat it!

20+ years ago one of my schools friends lost her father who left her mother, her brother and her - a share portfolio each (he had no pension as he had worked much of his life in Malawi & Botswana for himself.) My friend & her brother each got 75K's worth but what really impressed me, was that the div income from her mothers portfolio at the time was 35K pa. Her mother is still alive today, and has never had to adjust her lifestyle as over the years the div income has increased and so has the value of the portfolio.

l/woman - no i hadn't read that. thanks - i'm not a great believer in traditional pensions (not through ignorance, just my ol mum always said you get richer, quicker, sticking under your mattress - foolish....perhaps)

i'm not the bread winner in the household, what i'm doing is largly for fun/to learn but there is a part of me that would love to leave such a legacy behind.

cheers.

t.