Usually, the dividend is paid after the annual general meeting. In order to benefit from the dividend payment, the share must be in your securities account at that time. The dividend entitlement is also not forfeited if you sell the share after the dividend has been paid. How does the dividend arrive in your account and how are profit distributions treated for tax purposes? f you have the share in your securities account, the dividend will be credited to you automatically. You do not have to do anything. The final withholding tax due on dividends and the solidarity surcharge are also paid directly by your online broker.
Is it worth getting in and out of a stock in the short term because of the dividend?
On the day of the dividend payment, the share is traded at the so-called dividend discount (ex dividend). The share price is reduced by the value of the dividend payment. For example, if a dividend of 1.00 euro per share is paid out, the share price falls by exactly 1.00 euro.
It is therefore not worth buying shares in the short term because of the dividend, as it is a zero-sum game. Your assets do not increase by the amount of the dividend when it is distributed, but remain the same.
How much does the dividend contribute to long-term returns?
The effect of dividends in the long term is underestimated by most investors in Exness log in area. In the long term, dividends make a significant contribution to investment success, accounting for around half of the total increase in value.
What is the dividend yield?
The amount of the dividend can be expressed either in absolute terms in euros or as a percentage, the so-called dividend yield. The dividend yield is the ratio of the dividend to the current share price.
The dividend yield is practically the return on the stock investment. However, it depends on the share price and is therefore a daily fluctuating value.
Surf tip: Most investors hold shares to achieve price gains
How does the price formation of shares work?
A price is nothing more than a price at which a stock is trading at the moment. Prices are always formed, no matter what stock exchange, based on the supply and demand situation.
The price rises when:
- the demand for a security increases or the supply decreases.
The price falls when:
- the demand for a security decreases or the supply increases.
On the stock exchange, there is a continuous balancing of supply and demand. Thus, current prices are constantly determined and existing buy or sell orders are executed.
Why do prices fluctuate?
The market value or market capitalization of a stock corporation is calculated by multiplying the number of shares by the current share price. If the company can increase its market value in the future, the share price will also increase.
Opinions on how stock corporations will develop in the future, and thus also the corporate value of the AG, differ widely among a large number of investors.
Some of those who do not yet own shares expect the value of the share to increase in the future and therefore buy shares. In contrast, sellers of shares expect the value of the AG to fall in the future.
Accordingly, expectations are traded on the stock exchange and thus prices are permanently formed that optimally balance supply and demand.
Conclusion: Who sets on shares profits from dividend distributions and the chance on course profits
The purchase of shares offers opportunities to participate in corporate profits in the form of dividends. In addition, price gains beckon in the long term if the company manages to increase its enterprise value in the long term.
In the short term, however, the risks of investing in shares cannot be denied. The return on shares from dividends and price gains can fluctuate more than that of other forms of savings.
Therefore, invest in good and solid companies for the long term. In addition to regular dividend income, you receive profit opportunities based on the price development of the shares.
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