Sorry if this seems a really basic concept, I have tried researching the topic but mostly I come up with people trying to sell me books and/or software/subscriptions.
So, lets say I have $10,000 and buy shares in a company before the ex-dividend date, then after a week sell those shares and buy shares in another company before it's ex-dividend date, then wait a week and buy shares in a company before it's ex-dividend date... So in theory I have purchased $10K of shares in 3 companies before their ex-dividend dates, so I am then eligible for dividends from 3 companies... if I plan it well and select good companies, thats around $$7500 worth of dividends..
The question is: Although this seems potentially a good way to get cash flowing, perhaps a good strategy, what are the downsides? Will I be hit with a huge tax bill from such payments? (lets say all the dividends are 100% franked) Is this a safer way to short term trade? Is this how big funds get cash without endangering their portfolio?
