In an era in which investors don't make a dime in a money market fund, or a savings account, and 10-year treasuries yield less than 2%, the making of money on money, has become far more difficult than a generation ago, and while pundits and governmental authorities state over and over again, that interest rates will go back up, when this one thing or that other thing happen, it just hasn't been happening for the last decade, which makes one to reasonably conclude that it isn't going to happen in reality, anytime soon. All of this means, for conservative investors, that they are literally between a rock and a hard place, with nowhere safe to park their money to which they can be assured of both making a smallish profit as well as being secure that their investment is sound.
However, if one looks at the stock market, there are a fair amount of seasoned and well tested stocks, that have dividend yields of 4% of greater, such as Ford, General Motors, Hewlett Packard, Philip Morris, and Abbvie, to name just a few of them. In today's world, a yield of 4% is definitely something to pay attention to, but as you might expect there are a few caveats. For one, dividends themselves are not guaranteed, they can be lowered, raised, kept the same, or eliminated, and that decision is left to the Board of Directors; that said, though, companies with long standing historical records of consistently paying out dividends have a strong tendency to keep doing the same thing, come thick or thin. Another issue, perhaps the elephant in the room, is that stock prices are not stable, they can go up or down, so that in theory, on the one hand, you would not only get your dividend but also stock price appreciation, then again, you could also get the dividend but stock price reduction, placing yourself in the position of receiving the 4% yield, but having that yield wiped out by a greater than 4% loss in the subject stock price.
The way most dividends are paid in America, is that they are paid out quarterly to those that are the stockholders of record, and the stockholder of record, is he who owns the stock before the ex-dividend date, so if you buy the stock before the ex-dividend date and then decide to sell the stock on the ex-dividend date, you will still receive that dividend. This means, quite simply, that you don't need to own the stock for one year to receive dividends, nor ninety days, you only need to own the stock for one day, and that day has to be before the ex-dividend date and if done correctly you will receive that scheduled dividend payment. However, there is an important caveat, which is that on the ex-dividend date typically the stock price is set to open at the previous close minus the dividend share dollar amount, so that if the dividend paid was $1 on a $100 stock, the opening would be set for $99, thereby canceling out your entire dividend payment. That said, the fact of the matter is, that on any given day, stocks fluctuate and never remain stagnant, so that the stock price during that day and subsequent days will not remain the same.
This means that at a minimum you have gained the dividend, and if somehow or someway, you were to average selling back the stock at a price to which you have sacrificed, for instance, only half of the dividend payment, such as fifty cents of the $1, by selling at $99.50, and do this time and time again, on various other high yielding dividend stocks you will make over a period of time a fair amount of money, readily. However, there are two more considerations; one is the tax consequences of all this trading in and out, as well as also the commission costs of buying and selling of these equities. In regards to the former, there are no tax consequences if these trades are made through your IRA, and in regards to transaction costs there are brokerages that offer either free trades as a matter of policy or for a period of time and those too that offer significantly discounted trading costs which are almost immaterial.
There are websites that allow you to practice theories without costing you a dime of real money, and while practicing specific techniques, such as trying to game dividends, is never going to be quite the same as trying to do it in the real word, it will afford you the opportunity to test out a theory without sacrificing anything other than the time to do so. The bottom line is that every day there are buyers and sellers of equities to which each side believes that they are getting over on the other, in regards to dividends, and the correct pricing of the stock come the ex-dividend date, it's no different.