Mistakes You Should Avoid When Trading (Series)

Dividends

"A dividend is a payment made by corporation to its shareholders, usually as a distribution of profits."

One of the many mistakes people make is buying a stock just before its ex-dividend, merely for the sake of getting its dividend. Many people do this thinking that they get the extra money for the stock they bought, not realising that stock prices always drop on its ex-dividend dates.
In a bull market, the stock price may eventually recover to is pre-dividend state. But in cases of bear markets, your stock price will continue to get flushed down. Hence your losses will be bigger than your gain from the dividend.

Lesson: Do not buy a stock based on dividend payout at the last minute. Buy only when stock price is low to reap better dividend yield and capital gain.