Big market dip today?

[MVal]

Wow, I was expecting to see a big rise in my 401k today due to my bonus going in there this morning, but I see it's down more than 5%! I still have $2000 left to contribute to my Roth IRA this year, so this may be the best moment to do it! SALE!

[MasterStache]

Every moment is the "best moment." Don't try to time the market.

[geekette]

Friday was a down day, but also at this time of year, some funds will show an unexpectedly large drop.  That's when I check to see if they've gone ex-dividend.  The extra shares will show up in your account in a couple days. 

[Tyler]

Friday was a down day, but also at this time of year, some funds will show an unexpectedly large drop.  That's when I check to see if they've gone ex-dividend.  The extra shares will show up in your account in a couple days.

Yep.  Today is Q4 dividend day for VTI.

[MVal]

Friday was a down day, but also at this time of year, some funds will show an unexpectedly large drop.  That's when I check to see if they've gone ex-dividend.  The extra shares will show up in your account in a couple days.

Yep.  Today is Q4 dividend day for VTI.

So what does that mean? Is it better to buy stocks on or right after the "dividend day"?

[KCM5]

Friday was a down day, but also at this time of year, some funds will show an unexpectedly large drop.  That's when I check to see if they've gone ex-dividend.  The extra shares will show up in your account in a couple days.

Yep.  Today is Q4 dividend day for VTI.

So what does that mean? Is it better to buy stocks on or right after the "dividend day"?

As far as I know its pretty much priced in. As in the stock will be higher right before the dividend and lower right after the dividend payment. There should be no difference (efficient market theory and all that).

[Tyler]

Here's a pretty decent explanation of what's going on:

http://finance.zacks.com/stock-price-change-dividend-paid-3571.html

[matchewed]

MVal I would highly recommend putting things on autopilot as far as purchasing in your various accounts. If you can't then just DCA as reasonable. While you're doing that you can educate yourself in these things a bit more as it seems you're jumping at price fluctuations without understanding the underlying reasons. That is an emotional response to investing. Generally a bad thing and can burn you easily.

[geekette]

Friday was a down day, but also at this time of year, some funds will show an unexpectedly large drop.  That's when I check to see if they've gone ex-dividend.  The extra shares will show up in your account in a couple days.

Yep.  Today is Q4 dividend day for VTI.

So what does that mean? Is it better to buy stocks on or right after the "dividend day"?

It doesn't matter if it's in a tax deferred account.  If it's in a taxable account, then you'll have to pay taxes on the dividends. 

Say on 12/20 you bought shares at $10 each, and on 12/21 it went ex-dividend, dropped to $9/share and you got a dividend of $1 per share.  Reinvested or not, you'll pay taxes on that $1 per share.   

[MVal]

Friday was a down day, but also at this time of year, some funds will show an unexpectedly large drop.  That's when I check to see if they've gone ex-dividend.  The extra shares will show up in your account in a couple days.

Yep.  Today is Q4 dividend day for VTI.

So what does that mean? Is it better to buy stocks on or right after the "dividend day"?

It doesn't matter if it's in a tax deferred account.  If it's in a taxable account, then you'll have to pay taxes on the dividends. 

Say on 12/20 you bought shares at $10 each, and on 12/21 it went ex-dividend, dropped to $9/share and you got a dividend of $1 per share.  Reinvested or not, you'll pay taxes on that $1 per share.

Aww, really? So I will be paying taxes on any reinvested dividends in my Roth this year? Dang.

[geekette]

Your Roth is not a taxable account, so no.