Dividend interview?
Would this work or am I missing something?
Let said I hold $500 contained by an good narrative that pays 5.05% APR, afterwards on the second business year of respectively month, I use the money to buy bond mutual fund yield 5% that pays dividend monthly(record date is the ultimate business morning of respectively month).
I save the mutual fund lately for a year afterwards flog them and re-deposit to the money portrayal and repeat the process for the entire year. Will I earn 10% +- the realize gain or loss?
Answers:
No, because the payout on both the dividend and on the hoard story are rate base on the amount of time you have the money within the investment. For instance, if you have the $500 surrounded by for in the future, you would receive 1/365 of 5.05%*500 ($.07) If you have it within for the full month, you would own gotten 30/365 of 5.05%*500 ($2.10).
My numbers are a bit past its sell-by date because of compounding, but you should win the broad model.
That is call timing, and is much frowned upon in our time. Most mutual fund rules will not voucher that, more than once. Nice try though.
Good try, but if your scenario be to materialize, an awful lot of nation would be doing it next to millions.
The cost of the bond Will tend to rise as the narrative date approaches, and tend to jump down the daytime after. The cost of the bond is not constant. You would also probably hold to wages commissions to trade the bonds, which would also devour into your "profits".
Sorry !
Your broker fees to do it this style will put away adjectives of your profits.
If you be dealing beside millions of dollars, afterwards yes you could do this.
Same agency beside a personality's mortgage. If you get hold of a Home Equity Line Of Credit (HELOC) and use that to remuneration down your mortgage back the conclusion of the month to avoid the interest self calculated within Arrears, afterwards you can release closely of money on your loan.
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Let said I hold $500 contained by an good narrative that pays 5.05% APR, afterwards on the second business year of respectively month, I use the money to buy bond mutual fund yield 5% that pays dividend monthly(record date is the ultimate business morning of respectively month).
I save the mutual fund lately for a year afterwards flog them and re-deposit to the money portrayal and repeat the process for the entire year. Will I earn 10% +- the realize gain or loss?
Answers:
No, because the payout on both the dividend and on the hoard story are rate base on the amount of time you have the money within the investment. For instance, if you have the $500 surrounded by for in the future, you would receive 1/365 of 5.05%*500 ($.07) If you have it within for the full month, you would own gotten 30/365 of 5.05%*500 ($2.10).
My numbers are a bit past its sell-by date because of compounding, but you should win the broad model.
That is call timing, and is much frowned upon in our time. Most mutual fund rules will not voucher that, more than once. Nice try though.
Good try, but if your scenario be to materialize, an awful lot of nation would be doing it next to millions.
The cost of the bond Will tend to rise as the narrative date approaches, and tend to jump down the daytime after. The cost of the bond is not constant. You would also probably hold to wages commissions to trade the bonds, which would also devour into your "profits".
Sorry !
Your broker fees to do it this style will put away adjectives of your profits.
If you be dealing beside millions of dollars, afterwards yes you could do this.
Same agency beside a personality's mortgage. If you get hold of a Home Equity Line Of Credit (HELOC) and use that to remuneration down your mortgage back the conclusion of the month to avoid the interest self calculated within Arrears, afterwards you can release closely of money on your loan.