Diary of a Dividend Diva: When Playing in Controversy

A couple weeks ago, Linn Energy (LINE) came up as a point of controversy here at Real Money. I do not follow the name closely, so I am offering no opinion as far as that's concerned. I do, however, want to use it as a case study in the dividend-capture trading strategy. Linn Energy offers two lessons -- one in using dividend capture to avoid controversy, and one in not using a name that doesn't trade "right." 

As noted, I have no thoughts to offer on Linn's fundamentals. I do fully support healthy debate about the issues -- while avoiding personal attacks and so on. But, beyond that, keep this in mind regarding any name that offers an attractive yields but generates controversy: Dividend capture can be a way to garner the income while avoiding the volatility associated with the stock. By only owning it for a short period around the dividend ex-dividend date, you avoid the (downside) volatility generated by whatever controversy is swirling around that stock. ...308 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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