Why is it that I like my dividend capturing strategy to avoid what would seem to be a gambling scenario? First off let's just stick to good quality companies. As of today, there are over 3400 companies paying out dividends every year. Every day, every week and every month.... there is always some company, somewhere getting ready to share some profits with their shareholders. How do you choose a company that is going to be right for you and your goals? My suggestion... and it's just a suggestion, is to stick with the proven winners. The Dividend Kings, The Dividend Aristocrats and The Dividend Champions, just to name a few hundred stocks.
The Dividend King have been increasing their payouts to investors for a minimum of 50 years. Every year forking out higher and higher dividends. That's right... to make it onto this prestigious list. The dividend company has to consistently increase its payouts (50 years min, just to make the list). The Dividend Aristocrats and The Dividend Champions both require dividend increases for a minimum of 25 years.
The yields some of these companies payout is much higher the any bank offered CD at the moment. The yield is going to fluctuate just as the stock price moves up and down, however the dividend payments increase every year (price fluctuations will effect your ROI). With the dividends increasing every year this is what attracts many investors, regardless of Wall Street or the stock markets' condition. With plenty of investors chasing the dividends of these companies. That is what drives the price action of these stocks... and that is what it is we are looking for. Consistent price change directly related to the dividend date. That is what makes my approach to Dividend Capturing different and effective.