Sell $400k of VTI in my Roth to buy JEPI/JEPQ just before the dividend is paid??

[HankWilliams]

Hi, An idea popped in my head but I imagine someone had to ask this, think about this, warn about it, get burned for doing it, etc.

In my Roth, I have $400k of VTI (and another 30k of META and JEPI).

Would it be insane or dangerous to sell $400k of VTI...... just before.... the monthly dividend for JEPI (or JEPQ or SLOV... still learning about these) comes out?
Then with the huge dividend, buy back into VTI asap (set a GTC order)?
And then repeat this each month?

Is this dangerous? Risky? Or just crazy enough to work?!?

(PS: I have another $55k in my HSA.)

Thanks a lot.

[nereo]

It won’t work to your benefit.

Dividends are announced and “priced in” to the share price. From a company P&L perspective, the dividend is a known liability

 Further, the date that you have to hold the stock is much earlier than when the dividend is paid out. What you are proposing will result in you NOT getting the dividend (if bought a few weeks beforehand) but experience the liability drag of a dividend payout.

If there was any validity to this approach we would be hundreds of billions shifting to dividend stocks just before payout every single quarter. For the reasons I outlined this “chasing the dividend” approach doesn’t happen

[achvfi]

Usually security price drops as much as dividend on ex dividend date. You don’t get extra money with a dividend. It is just a transfer from your etf value to you as a dividend.

These games don’t work. Stick to your long term investment strategy. Time in the market…

[2Birds1Stone]

Terrible idea.....

Share price = $100
Dividend = $5
New share price = $95

[ATtiny85]

Try it with $1,000 and see. The sharp responses over on BH and what we have so far here might not be enough to convince you.

[bacchi]

Terrible idea.....

Share price = $100
Dividend = $5
New share price = $95

Correct. This is done automatically by the exchange. The stock price will change later in the next day from trading activity but the price is definitely adjusted downward on ex-div (before market open the next day).

[RWD]

Seems like you'd trigger wash sales for no benefit with this strategy

[jim555]

Ex-div date trades lower by the div amount.