The strategy concept dates back to 2017 when I first saw it work. I was a stockbroker at an independent firm in London and selected a few clients to use the strategy to capitalize on short-term price appreciation without the high-income tax burden.
At that time the income tax rate in the UK was 20-40-45% and none of the clients wanted to pay more income tax just because of dividends so it was a necessity to sell the stocks before the ex-dividend date.
Smart money managers and stockbrokers noticed this concept that a lot of people buy particular stocks but sell them before the dividends not to fall into a higher inc
ome tax burden.
On this pattern my firm where I worked built a very simple strategy for clients to capitalize on this opportunity:
A month before the ex-dividend date, clients bought high dividend-paying stocks and sold them just before the ex-dividend date.
8 out of 10 times they made money so doing it over the long-term was a no-brainer.
Fast forward to 2022 I no longer work for a London brokerage company but upgraded the strategy.
Using hundreds of thousands of rows of data and analysis we now have sophisticated software that not only tells you based on analyzing hundreds of high dividend-paying companies which one to buy but gives you an exact date when to buy it to maximize your profit.
We also discovered that this short-term price appreciation works even better with U.S. stocks and gives the investor more opportunity (due to 4 quarterly dividends per company). In addition, if we not only choose one stock to work on within a year but choose the best series of stocks to buy and sell prior to the ex-dividend date the profit jumps even higher.
The current system (which we upgrade continuously to give investors better returns than the previous version) can significantly outperform the market.