Buying MSTY Before Dividends Worked Most of the Time

"For as long as many people can remember, MSTY ( NYSEARCA:MSTY) has been at the top of the YieldMaxETFs subreddit as the go-to for taking advantage of dividend yield. This has unquestionably been one of the hottest names in the market right now, at least if you are a "retail investor" or someone who spends a lot of time hunting subreddits for the next big thing. Unsurprisingly, since Reddit is so popular with these topics, one Redditor posted their data-driven analysis in r/YieldMaxETFs, explaining that they had beaten the dip five out of six times and achieved some robust gains as a result."

"The results are likely going to surprise most people in that the Redditor saw that in five out of the six months, buying MSTY before the dividend actually worked out better than waiting. Surprised? You are not alone, as many other Redditors thought this would be the case. On the plus side, in a rare turn of events, the Redditor comment section on this post was overwhelmingly grateful for this study, as it provides people with a lot to think about. This is one of the big benefits of using a platform like Reddit to do research about investments, as there is a lot of groupthink."

A six-month test tracked pre-dividend price, dividend amount, ex-dividend drop, and next-day trading for MSTY. Results showed buying MSTY before the ex-dividend date outperformed waiting in five of six months. Expected post-ex-dividend price drops often failed to fully offset dividend gains, producing net positive outcomes for pre-ex purchases. The pattern produced robust gains in most months examined. Community responses were largely grateful, with commenters noting the value of crowd-sourced data and its ability to challenge conventional advice about avoiding purchases before ex-dividend dates.

Read at 24/7 Wall St.