What is dividend trading?

Dividend trading comes in different ways.

The most commonly accepted form of dividend trading is to buy stocks that make monthly or quarterly payments to shareholders.

But there is also the dividend capture strategy. This is a trading tactic of purchasing a stock before the dividend is paid, holding the security to collect the funds, and then selling the stock.

Overall, dividends are critical to every portfolio since they can serve as a source of regular income, no matter how large or small.

You should always include a company that maintains a strong track record of making routine payments and even regularly increasing the dividend yield.