A dividend rollover is an investment strategy where you purchase a dividend-paying stock right before the ex-dividend date. The goal of the dividend rollover strategy is to sell the stock as close to or above the purchase price as well as capture the value of the dividend. For corporations, there can also be a tax benefit on the dividend income. The dividend rollover strategy is also known as the dividend capture strategy.

Although the dividend rollover plan seems to a sure-fire way to make a quick profit, this strategy can be challenging. The success of a dividend rollover plan relies on several complex market factors such as the size of the dividend and the price of the stock. Before engaging in the dividend rollover strategy, here are some things to consider:

1. Understand how to perform a dividend rollover.

2. Obtain information from a dividend rollover expert.

3. Find the appropriate stocks to make a dividend rollover investment.

Action Steps
The best contacts and resources to help you get it done

Learn the details for performing a dividend rollover

Before you contact a dividend rollover expert, you should obtain dividend rollover information so that you can understand the concepts of this transaction.

I recommend: Best Dividends.com offers an explanation and an example of a dividend rollover.

Protect your business by contacting a dividend rollover expert

Once you understand what a dividend rollover plan consists of, you need to contact an expert to receive dividend rollover advice. Besides the complexities of the actual act of selling the stock, there are multiple tax implications that may impact your business. In order to best protect your business, you also need to discuss the tax implications with the dividend rollover expert.

I recommend: The website UnitedFinancialAdvisor.com allows you to search for financial advisers in your area who are experts in the dividend rollover strategy. You can also get dividend rollover advice from a financial adviser at E*TRADE Financial if your investment portfolio is $50,000 or more while TD Ameritrade offers advice with portfolios of $200,000 or more.

Find the appropriate stocks to make a dividend rollover investment

There are several funds that utilize the dividend rollover strategy. There are also online services that offer information about stocks and expected dividends with the ex-dividend date to help you personally select specific stocks to focus on if you are interested.

I recommend: Eaton Vance Distributors, Alpine Woods Capital Investors, and RMR Advisors offer funds that employ the dividend rollover strategy. DividendsWatch.com produces a free newsletter with dividend information and ex-dividend dates.

Tips & Tactics

Helpful advice for making the most of this Guide

• •  If you are comfortable with the buying and selling of stocks, you may want to try the dividend rollover plan yourself so you can avoid the brokerage house fees.