If you believed a dividend cut was inevitable, it ...

2009-01-02T10:53:00.000-08:00

If you believed a dividend cut was inevitable, it would be better to sell well ahead of the announcement. By the time the cut's announced, chances are the stock's already fallen quite a bit.

Of course, once a cut is announced, there's still a whole lot of downside left in the stock. Your examples illustrate that point very well.

And if you wanted to get super fancy, you could write in the money covered calls on the offending stock, giving you protection to the downside and recouping/replacing the lost dividend stream with the option premium.

But, in the end, selling the %#$#@# thing is probably the best course.

Comments on Dividend Growth Investor: When to sell my dividend stocks?

If you believed a dividend cut was inevitable, it ...