Is it good to buy any stock before ex-dividend? Is this beneficial to me?

General
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Is it good to buy any stock before ex-dividend? Is this beneficial to me? Any pro players, please explain this. Already,’ I ‘READ’ topics related to this here but yet in confusion so raised this thread.’

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If you buy a stock before its ex-dividend date and hold it till the ex-dividend date then you are eligible for the dividend.

What exactly is your confusion? What do you mean by “is it beneficial to me”? What will you consider as a benefit?

One general principle to note: If there is some information or course of action which is public knowledge and is available to everyone, it is very unlikely that you will be able to gain any special extra benefit from that information or action, apart from what it looks like at face value.

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Is it possible when a dividend is declared, based on the dividend amount per share, the CMP could increase and on the ex-dividend date, the CMP could fall.

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Yes, this is possible. But also: anything is possible when it comes to share prices. So it would not be prudent to depend upon this happening.

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Thanks for your reply. Now I come to the benefits part. When the stock announces a dividend. My thoughts will be like if I, buy this I get both the price up profit and dividend amount. (double profit)

P.S. I am a newbie.

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Your confusion is normal, but as ZeroIndian mentioned, market price does not depend only on dividends, there are several other factors.

There is a possibility of you getting the dividends and the CMP can keep on increasing. (super benefit for you)
There is also a possibility that after you get the dividends, people may sell, and the CMP will fall and fall badly (negative benefit for you)

So do not take a decision to buy solely on dividend aspect - as ZeroIndian has mentioned.

Non related topic:

I was told that due to heavy dividend payments done by the “maharatna” PSU’s as they are owned by Governments, do not fare well when compared to their private entities.

Look at SBI - Right now it is at 420 but it was loitering around sub 300 level last year.
ONGC - 110, NTPC, PFC and so many the price just does not go up.

These are great companies, but because the ownership is Government they are not great wealth creators. FII avoid this group in totality

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Another related incident:

One of user in another forum used to say, long time back, that he used to buy companies which were going to give bonus shares. he used to enter those companies on the ex bonus date when the CMP fell by the bonus ratio and he used to hold it. Wonder what happened to his strategy.

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