How long do I have to hold a stock to get the dividend?
This is a quick explanation of some important terms in dividend investing, a basic idea of how to invest in dividend paying stocks and how to understand some basic terms when investing in dividend stocks as a beginner.
The most important terms to know here are -
What is a dividend?
A dividend is spare cash paid out to shareholders.
What is an ex-dividend date?
The ex-dividend date is the deadline before which you have to have owned some shares to receive the next dividend payment.
What is a dividend declaration date?
The dividend declaration date is the date that the information on the upcoming dividend is shared with the shareholders.
What is the market cap of a stock?
The market cap of a company is the total value of the company on the stock market.
When a dividend is paid to shareholders the value (market cap) of the company will drop, as the company has given some of its cash out as a dividend. The drop will happen on the ex-dividend date as this is the deadline date to receive the dividend. Anyone who buys shares after this date will miss out of the next dividend.
