Are there any good studies on how stocks move around times of dividend payouts?

This post assumes the stock market is not made up of a large number of rational agents, but instead, human beings with emotions and computer software with bugs. If you're not a fan of such a premise, this is not a good thread for you.

Momentum investing works. You can, on average, buy a stock that went up in the last three months and it will beat the market. Funds like to sell booming companies to 'balance their portfolios'; no one in 2011 wants to buy into a 1% fees fund that has ballooned to be 70% Apple.

Of course dividend announcements flag information about a company's management and strategy. But dividend payouts should have no real effect on the value of a holding; you get cash, the company loses cash.

But maybe dividend payouts do affect the value of your holding? Is buying right before or maybe a month after a dividend pay out a perverse but market beating strategy? It shouldn't be but has anyone actually checked and made their results public?

Submitted July 15, 2017 at 07:23AM by moomin100

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