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Read a book from the UK once upon a time about this but can't for the life of me remember the title.

Idea is to grow your portfolio from dividend payouts by buying high quality high yielding dividend stocks and then selling the shares after the dividend payout. Obviously volumes need to be large enough to cover buy and sell transactions fee's.

The assumption is that the high quality stocks are not very volatile to safe guard against massive price fluctuation upon entry and exit.

1. When is the latest you can purchase a stock as close to the dividend payout date?

2. Is there a rule as to how long you need to own the stock for after the dividend payout?

3. Anything else one should take note of with a strategy like this?

Thanks Moneypenny.

Is there a tried and tested way to do this profitably?

The fact that the share price drops by the same value as the dividend the next day or Monday will make the trade a loss after deducting transaction costs, negating the strategy.

I may remember reading something about writing a covered call or put option when purchasing the stock to get you into profit after the dividend had been paid and stocks sold off. This sounds very technical and would love to learn more about it.

Hmmmm interesting comment you made there. I wonder if I can buy a CFD to go lower, because as you mentioned, the price tends to fall by the value of the divvy.

I have investigated the whole divvy thing. You need so many shares to make it worth your wile. The alternative would be to buy a derivative that does get a divvie payout like share installments on the share. But that opens another can of worms.

I guess it can work if a person has good knowledge about stock market. It is necessary to know that which stock is good for buy and which one is worse. To earn higher dividend, it is necessary to have good stocks in your portfolio.