Q: What's the good of dividends? The prices of my stocks usually fall by the amount of the dividend after they're paid out.
A: The day investors get a dividend should be a happy one. Who wouldn't like to get a cash payment?
But the smile on dividend day can often fade away after taking a closer look at the stock price. It's pretty typical for the current stock price to fall on the day that dividends are locked in.
Specifically, on the day that companies cut off which investors get the dividend, the stock price can fall by the amount of the dividend being paid. This day is called the ex-dividend date, and after that day, investors who buy the stock aren't entitled to the dividend. If you're a dividend investor, you owe it to yourself to understand several key days when it comes to these important cash payouts:
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