Dividend Capture Strategy

What is the Dividend Capture Strategy?

Income investors who buy stocks for their dividend payouts will always keep a close watch on the ex-dividend date. Using what's called a dividend capture strategy, these investors scoop up the stock right before it goes ex-dividend, capture the dividend, hold the stock for at least 61 days -- the minimum time required for a dividend to be taxed at the recently reduced 15% rate -- then move out of the stock and into another security that is about to go ex-dividend.

You only have to own a stock for one day—the market day prior to the ex-dividend date, to collect a dividend.

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