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Dividend Harvesting

Discussion in 'Shares' started by balwoges, 29th Apr, 2018.

  1. balwoges

    balwoges New Member

    Joined:
    20th Sep, 2016
    Posts:
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    Location:
    Lake Macquarie
    I plan on doing some Dividend harvesting in a small way [bank shares] - I have a solid portfolio of shares [which I intend to keep] and cash for living expenses for the next 3-4 years [I am a SFR]. What should I be aware of - I know about the 45 day rule, anything else?
     
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  2. twisted strategies

    twisted strategies Well-Known Member

    Joined:
    3rd Nov, 2013
    Posts:
    683
    Location:
    QLD
    i had a look at this technique ( style if you prefer ) and don't currently have the confidence to try it with cash ( only in tipping competitions )

    what i DID do is buy some HVST ( which attempts the same thing ) and set it for full DRP

    ( please read all the documentation before you buy this it has some quirks )

    the unit price is going down steadily ( and i am irregularly and cautiously buying the downtrend as well as the DRP compounding effect )

    the MAIN ( and real ) hazard is that the divs in the top 200 slim down/dry up ( probably dropping the share prices along the way ) and the near/mid term future

    please note this ETF seems to keep a core holding of roughly 5% of each of the BIG 4 banks ( probably to reduce transaction costs ).

    however the risks in HVST are similar to div. stripping ( with less fees but possibly more risk )

    would div. stripping work while participating in the DRP i wonder ( out loud ) ???

    i tried it once ( successfully ) with QFN but that was to exploit a passing opportunity ( with previously committed cash )

    a trend towards reduced divs. ( in the near future ) might be problematic for you

    cheers and good luck
     
  3. Hodor

    Hodor Well-Known Member

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    17th Sep, 2016
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    hodor
    What methodology are you planning to use?

    Problem is the dividend payout is priced in by the market.
     
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  4. twisted strategies

    twisted strategies Well-Known Member

    Joined:
    3rd Nov, 2013
    Posts:
    683
    Location:
    QLD
    not universally ... there are some anomalies ( sometimes ) HVN and BOQ would be worth a closer look both have a history of being hammered cum div and not always so punished going ex-div

    but could I make a living ( useful wage ) out of those exceptions , i don't currently think i can which is why i tried a tweak using HVST hoping to accumulate units in a downtrend via the DRP ( HVST is valued on NTA , not shareholders' opinions of a share price )