The announcement of dividend distribution by a go public company is usually an announcement that is always eagerly awaited by shareholders. Especially if dividends are distributed in large quantities. So that dividend announcements will generally increase the company's stock price.
Usually the stock price will start to rise fast approaching the date of dividend cum date. If you don't know what cum date and ex date are, read the post: Meaning and Illustration of Dividend Distribution. This is because if you own shares before the cum date, then shareholders will get dividends.
If you want to participate in buying, I do not recommend that you collect the shares right on the ex date. Why is that? Usually, stock prices are prone to fall one day after the dividend cum date or more precisely on the ex date.
This usually happens very often, especially in stocks whose dividend announcements are responded positively by the market (indicated by rising stock prices ahead of the dividend cum date).
Do not believe? I give examples of LSIP shares whose cum date is June 8, 2017 and INDF shares whose cum date is June 9, 2017. On June 8, when the cum date of LSIP closed down to 1,450. On the next day (ex date), LSIP opened immediately, dropped to 1,420 and the closing price was 1,405.
INDF also experienced the same thing. On June 9, INDF closed down at 8,450. The next day on the ex date, INDF was immediately opened to a price of 8,400 and after that it fell again to 8,325. Here you can see that market participants will sell their shares on the ex date because market participants feel that they have received dividends and the stock price has gone up high, so it's time to take profit.
If you buy shares a few days before the cum date, you've already got a high stock price increase before, so when you sell on the ex date, you can still earn.
So, if you are late in finding a company that will distribute dividends very close to the cum date, it is better not to chase because you have a fairly large potential loss when entering the ex date date.
