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12-29-2018, 06:49 AM
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#1
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Recycles dryer sheets
Join Date: Nov 2015
Location: Fort Myers, FL & Lake Of the Ozarks, MO
Posts: 230
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Timing of dividends
Question --- I have our investments in IRA/Mutual Funds at Fidelity --- I am wondering if I move the investments to more bond secure funds, will I still get the dividends through the end of the quarter/year if I no longer have any $$$ in said funds ? ---- I have never known if you get paid through a certain day or the investments need to stay until the end of the quarter ??
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12-29-2018, 07:07 AM
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#2
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Thinks s/he gets paid by the post
Join Date: Oct 2017
Location: Tellico Village
Posts: 2,622
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Quote:
Originally Posted by LakeRat1
Question --- I have our investments in IRA/Mutual Funds at Fidelity --- I am wondering if I move the investments to more bond secure funds, will I still get the dividends through the end of the quarter/year if I no longer have any $$$ in said funds ? ---- I have never known if you get paid through a certain day or the investments need to stay until the end of the quarter ??
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Funds have declaration dates for dividends. If you are the owner of the fund on that date, you will get the dividend. On bond funds, it is accrued by how long you own the fund and paid usually at the end of the month. Remember the dividend is like a forced distribution as the value of the fund drops to match the dividend. It is not really a concern, other than taxes, for when to sell the fund and move to bonds.
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Retired May 13th(Friday) 2016 at age 61.
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12-29-2018, 07:24 AM
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#3
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Thinks s/he gets paid by the post
Join Date: Jan 2006
Posts: 4,172
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https://www.investor.gov/additional-...led-stock-cash
I always get confused by all the different dates. You can learn for yourself...............but as Van Winkle suggests, if you get the dividend you are not necessarily better off since the dividend + share price will be no different than the share price before (ignoring market effects) and you will have a dividend that will be taxed. Might be better to not get the dividend.
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12-29-2018, 07:36 AM
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#4
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Nov 2010
Location: Sarasota, FL & Vermont
Posts: 36,364
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Quote:
Originally Posted by LakeRat1
Question --- I have our investments in IRA/Mutual Funds at Fidelity --- I am wondering if I move the investments to more bond secure funds, will I still get the dividends through the end of the quarter/year if I no longer have any $$$ in said funds ? ---- I have never known if you get paid through a certain day or the investments need to stay until the end of the quarter ??
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No, since you won't be a shareholder of record on the declaration date. But you don't get shortchanged because the value of the dividends is included in the NAV that you receive when you sell, because any fund cash is included in the NAV.
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12-29-2018, 07:41 AM
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#5
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Join Date: Apr 2013
Posts: 11,078
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Quote:
Originally Posted by pb4uski
No, since you won't be a shareholder of record on the declaration date. But you don't get shortchanged because the value of the dividends is included in the NAV that you receive when you sell, because any fund cash is included in the NAV.
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+1
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12-29-2018, 09:09 AM
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#6
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jun 2005
Posts: 10,252
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Quote:
Originally Posted by VanWinkle
On bond funds, it is accrued by how long you own the fund and paid usually at the end of the month.
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Many bond funds work that way, but many do not. You have to read the prospectus to find out or have the personal experience or maybe even call a sales rep who can tell you.
Also bond exchange-traded funds do not work that way.
For the bond funds that don't give you a pro-rated dividend for the part of the month that you held your shares, the dividend value is embedded in the share price just like it is with stocks.
In other words, no one is ever ripped off in the USA when it comes to whether they get their share of any dividends.
Quote:
Originally Posted by LakeRat1
I have never known if you get paid through a certain day or the investments need to stay until the end of the quarter ??
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You don't have to know because you get paid the accrued value of the dividend no matter what. Basically, don't make any investing decisions based on a dividend. See also: https://en.wikipedia.org/wiki/Dividend_puzzle
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12-29-2018, 09:16 AM
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#7
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jun 2005
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And nobody ever understands record date or declaration or payable date, but they do understand ex-dividend date.
If you buy the shares on the ex-dividend date or later, you don't get the dividend even if you own the shares.
If you sell the shares on the ex-dividend date, you get the dividend even if you no longer own the shares.
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12-29-2018, 09:45 AM
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#8
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jun 2005
Posts: 10,252
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One can make a case for some taxpayers to avoid dividends in a taxable account even if they pay no taxes on dividends because they are in a low tax bracket, too.
There are some "cliffs" that people have heard about. If one gets dividends in a taxable account, then they contribute to one's adjusted gross income. But suppose one has $300,000 in carryover losses and is about to get $10,000 in dividends. If one sells before the shares go ex-dividend, then any capital gains would be offset by the carryover losses and the AGI is not increased by $10,000.
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12-29-2018, 06:23 PM
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#9
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jun 2005
Posts: 10,252
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Quote:
Originally Posted by pb4uski
No, since you won't be a shareholder of record on the declaration date.
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Careful! In most instances the declaration date is not the record date nor the ex-dividend date nor the payable date.
The declaration date is just the date that those other dates are confirmed AND the amount of the upcoming dividend that will be paid. It could be a day or days or weeks or even months before the actual ex-dividend date. It is the date that the amount of the dividend is declared so that investors can make decisions whether to sell, buy, or hold before the next dividend is paid out to shareholders of record.
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12-29-2018, 06:30 PM
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#10
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Recycles dryer sheets
Join Date: Nov 2015
Location: Fort Myers, FL & Lake Of the Ozarks, MO
Posts: 230
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Thank You Very Much
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12-29-2018, 06:53 PM
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#11
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Nov 2010
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Quote:
Originally Posted by LOL!
Careful! In most instances the declaration date is not the record date nor the ex-dividend date nor the payable date .....
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I miswrote, I meant the record date and not the declaration date... as I recall dividends are paid to shareholders of record as of a specified date.
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.
Retired Jan 2012 at age 56
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12-29-2018, 07:46 PM
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#12
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Thinks s/he gets paid by the post
Join Date: Oct 2017
Location: Tellico Village
Posts: 2,622
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Quote:
Originally Posted by pb4uski
I miswrote, I meant the record date and not the declaration date... as I recall dividends are paid to shareholders of record as of a specified date.
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I miswrote as well, it is the Ex dividend date that counts, not the declaration date.
VW
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Retired May 13th(Friday) 2016 at age 61.
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12-29-2018, 07:58 PM
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#13
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jun 2005
Posts: 10,252
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Quote:
Originally Posted by pb4uski
..., I meant the record date and not the declaration date... as I recall dividends are paid to shareholders of record as of a specified date.
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That is true. But the issue is that since there are different settlement times for different kinds of investments, using the record date is problematic.
The ex-dividend date is calculated backwards from the record date taking into account the settlement time for that particular investment. That's why I think many people believe the ex-dividend date is the best way to know if they will get a dividend. Of course, the ex-dividend date is not the payable date, so the dividend doesn't show up on the ex-dividend date unless the brokerage advances one the money from the dividend.
And a place like Vanguard doesn't put "ex-dividend date" in its mutual fund online pages like it does for its ETFs and like other fund companies do. Shame on Vanguard.
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