Recently, I’ve seen a lot of new investors asking questions about high-dividend stocks. In fact, this reflects that more and more people are starting to pay attention to this kind of investment.

I’ve also noticed an interesting phenomenon: many people get stuck in a misconception. They believe that the stock price will definitely fall on the ex-dividend date, and then they hesitate about whether to buy on that day. But in reality, the stock price’s performance on the ex-dividend date is far more complex than most people think.

Let’s first talk about why this kind of thinking exists. When a company goes ex-dividend, it does distribute cash to shareholders. From an accounting perspective, that money essentially means the company’s assets are reduced, so in theory, the stock price should adjust downward. For example, suppose a company’s stock price is $35, which includes $5 in idle cash. The company decides to pay a $4 dividend—then on the ex-dividend date, the stock price would theoretically drop from $35 to $31. This logic is sound, but it’s only a theoretical value.

After carefully looking at the ex-dividend history of some industry leaders, I found that the situation is actually quite interesting. For companies like Coca-Cola, which consistently and steadily pay dividends, the stock price on the ex-dividend day may sometimes even rise slightly. Apple is even more striking. Because tech stocks are highly sought after, some ex-dividend days see no small gains. So what does this show? It shows that stock price movement isn’t influenced by the ex-dividend event alone—market sentiment, company performance, and investor confidence all play a part.

Here, I want to emphasize an important aspect of the benefits of going ex-dividend. For companies with solid fundamentals and a leadership position in their industry, going ex-dividend is often not a bad thing—instead, it can be a buying opportunity. That’s because paying dividends itself indicates that the company has stable cash flow and a healthy business model, which is exactly what long-term investors care about.

As for whether you should buy on the ex-dividend date, I think you should consider three angles. First, how has the stock price performed before the ex-dividend date? If it has already risen to a high level, many investors may take profits early—entering at that point can be quite risky. Second, look at the company’s historical price trends. Some stocks gradually “fill the gap” after going ex-dividend, with the stock price recovering back toward the pre-ex-dividend level. This is a sign that investors are optimistic about the company’s future. Conversely, if the price keeps trading below the expected level and doesn’t recover for a long time, you should be cautious. Third, and most importantly, what do you think about the company’s fundamentals? Do you plan to hold long-term?

My observation is that for genuinely high-quality companies, buying around the ex-dividend date and holding for the long term is often a more cost-effective strategy. That’s because the company’s intrinsic value hasn’t changed; the stock may become cheaper due to short-term price adjustments. By comparison, if someone wants to trade short-term volatility around the ex-dividend period, they need to factor in tax costs and transaction fees—these hidden costs often end up wiping out a significant portion of returns.

So my advice is: instead of obsessing over whether the stock price will fall on the ex-dividend date, ask yourself first—do I like this company? How long am I planning to hold it? If the answer is yes and you want to hold long-term, then the ex-dividend date can actually be a good opportunity to add to your position.