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I work for an electric utility. Right now the company stock pays over a 5% dividend. A co-worker was telling me his strategy of moving all the funds in his 401K (moving funds around is free) into company stock about a week before the ex-dividend date, then moving it back out the day after the ex-dividend date. I found that to be an interesting strategy. In theory, the price of a stock should drop by the amount of the dividend paid on the ex-dividend date, but that just doesn't ever seem to be the case. I'm considering using this same strategy. Right now I'm 98% in an S&P index fund (about $175,000) and about 2% in company stock (it's the little bit they match). Does anyone have any thoughts on this strategy? I'm going to cross-post this on the Energy & Utilities Board to see what they think as well.


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