NEW YORK (MainStreet)Dividends are an added bonus to any investor's portfolio, because of the high volatility they creates and the funding they provides. After a dividend is announced, the share price of the stock usually rockets up due to the potential dividend the investors could inherit. But when the ex-dividend date hits, the stock price usually declines.
Dividends, quite simply, are funds allocated to investors or shareholders by a security due to a specific profit margin reached by the company. Not all securities provide a dividend. Unlike quarterly earnings reports and other data where there is a set released date each quarter, there is no specific date that a company releases its dividends.
When investing in stocks that possess dividends, there are three objectives that you should keep in mind. The ex-dividend date (the date you must contain the stock), the pay date (the date you receive the funding), and the date of record (two days after the ex-dividend date).