The Money Mustache Community
Learning, Sharing, and Teaching => Investor Alley => Topic started by: alwaysonit on August 23, 2014, 02:27:08 PM
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Are the reinvested dividends of an accumulation fund included in the index price?
For example, if I buy the fund at 1000 and it finishes the year at the same price of 1000 but payed 2% dividends which were automatically reinvested, when I check the price history of the fund would it be shown as 1000 or 1020 at the end of the year?
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You would own more shares if their were dividends that were reinvested.
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Great, that's what I was hoping for.
What is there to stop me buying a stock the day before they pay, say, a 2% dividend and then sell it the next day after they've paid me? Will the value of a stock drop by the dividend amount in general?
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Yes the value of the stock will dip to absorb the expected dividend.
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Yes. It's called "buying the dividend". No net gain in value in your account, but it is a taxable event to you. So it's a net loss to you after taxes