I thought I purchased at an average of 2.05 but I ended up with 2.1. Hence its tempting now to buy more
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I thought I purchased at an average of 2.05 but I ended up with 2.1. Hence its tempting now to buy more
I'm not making any comment on whether a dividend stripping strategy will work here with AIR but usually it requires buying 2-4 weeks before dividend and holding for a few weeks after so if you bought at say $2.25 you've now received the 35c dividend and if the price gets anywhere near $2.25 in the next few weeks you're a winner (this time). The debate of course is that there are a whole range of factors affecting the price apart from the dividend itself over a period of 4-5 weeks but over my investing life (c. 3o years) it happens more often than not - look at Contact in the past 10 days - went ex 15cps and recovered it within a week. People will argue all day long about efficient markets etc but that looks a text book dividend strip to me....
Contact recovered in 48 hours
Hv only got one parcel of medium size at 204.5 and that's it, didn't add any more or sold any of that yet and no immediate plans of selling....
Over the last 4 dividends paid by AIR the average recovery time to the pre-dividend price has been 37.5 days (Close prices used). After an average of 14 days the close price was at its lowest.
Pre Div $2.90 - Ex $2.84 - 5 days later $2.75 - 13 days later $2.90
Pre Div $2.53 - Ex $2.41 - 1 days later $2.35 - 28 days later $2.58
Pre Div $2.97 - Ex $2.88 - 16 days later $2.67 - 37 days later $2.97
Pre Div $2.21 - Ex $2.06 - 34 days later $1.79 - 72 days later $2.23
Thanks for the post Roger, as a young person on less than 48K I would never have known this otherwise. It seems there is a significant tax incentive for me to invest in shares paying regular imputed dividends. So all I need to do is submit the imputation credits and dividend amount at the end of the year on my personal tax summary?
That would be after normal div. So if you deduct the 25c special from closing price of 2.41c, then $2.16c will be the recovery price. My recovery price is $2.134c at the moment. So am not too worried at this stage, especially when on the ASB securities AIR detail page saying the cps is 45c and the yld is 21% odd for unsuspecting new comers to the site:).
You're welcome mate. I enjoy contributing for the benefit of others and yes you are right anyone on under $48K, marginal tax rate 17.5% can get quite a nice benefit from investing in shares paying full imputation credits at 28%. Just a note of caution though. The IRD gives you a tax credit for all your imputation credits but will not refund imputation credits per se. People need to have some other form of tax credit, RWT deducted, tax paid or PAYE credits which are refundable for the imputation credit to be effectively utilised in the year in which its received otherwise the imputation credit carries forward to future years. Yes just fill out the dividend section of your tax return with all the information contained in your dividend statements and Bob's your Uncle :)
That's how I approach dividend stripping - when i play this game i buy about 2 weeks before the announcement and sell about 2 weeks after ex div.Quote:
Arbroath ......I'm not making any comment on whether a dividend stripping strategy will work here with AIR but usually it requires buying 2-4 weeks before dividend and holding for a few weeks after...........
This time around real bonanza with AIR. - 35 cent divie and maybe not even a cap loss (12 cebts at moment)
Back testing
Sept 14 - divie 15.5 and share down 2 = BRILLIANT
Mar 15 - divie 6.5 share up 14 = MORE THAN BRILLIANT
Sep 15 - divie 9.5 share down 20 = BIT SAD
Mar 16 - divie 10 share down 1 = PRETTY GOOD
Sep 16 - way its heading = AWESOME
as pointed out by somebody last week good things don't continue for ever so next March?
Roger can you or some other maths genius please tell me what amount will go into my bank account on 10000 AIR shares and my tax rate is 17.5%. I want to mentally spend it today.
The same as everyone else...
10000*.35/.72*.67=3,256.95.
Gross dividend will be 4,861.11
Imputation credit 1,361.11
Tax withheld 243.05
Net paid 3,256.95
File it in your tax return next year and your final tax will be 850.69(4861.11*.175). Refund will be 1361.11+243.05-850.69=753.47.
As Roger has mentioned you need to be paying enough tax to get all your imputation credit but if not then you can carry it forward to future years.