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Alpine Total Dynamic Dividend F Message Board

  • tomcypert tomcypert May 13, 2008 2:17 PM Flag

    High Dividends

    Doesn't some of the high dividend payout in AOD cause a decline of NAV. I noticed that the NAV has declined substantially in the past year or so. I guess I'm in the "there is no free lunch crowd."

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    • AOD has been trading above their NAV for months.

    • Chris,

      AOD's uptick today is probably because people are buying prior to AOD's ex-dividend date which is Wednesday, I believe. If I am correct, today and and tomorrow are the last days to capture the dividend.

    • AOD is trading above their NAV which is great. Some big institution are buying into this closed mutual fund. I would prefer AOD to stay around 16 because my dividends are re-invested. You can not beat 12% or better (I am considering that AOD will give another special distribution at the end of the year)
      This beats the bank and their CDs. CDs are a poor man's investment.


    • Dividend is not going to be reduced. Last year in the stock market it was tougher and AOD gave out a special dividend at the end of the year. I expect a long term capital distribution at the end of the year. AOD is making a lot of money.

    • Well said. If and when the dividend is reduced, which I feel will not be the case, than the NAV comes into play. But given AOD's history in it's 1 year existence and the fact that they paid a healthy special dividend at the end of last year, I feel this is as safe as an investment as a person can find during this period of financial uncertainty.

    • Well said. "The bigest risk is not taking one"

    • fyi...aod's current nav $16.00 as of thursday...up from about $15.50 ish the week b4.

    • stored_energy
      Thanks for information. A.G. Edwards writes about a closed-end fund.A share price discount to NAV is generally viewed as an attractive means to purchase assets below their fair value while a share price premium would indicate investors willingness to pay more than the fair market value of the net assets. In some cases investors may be willing to pay a share price premium because of a fund's unique structure or above average return performance. However, if investor sentiment toward equities was to turn negative (lowering the divident) AOD's share price might under-perform NAV resulting in a share price discount to NAV. That A.G.Edwards statement. Pilot

    • Pilot,

      The NAV is important. At some point a lower NAV, can erode the value of the pool of assets that form the fund. This could manifest as lower dividend yields or out right bankruptcies. In the extreme, if the fund closed down (unlikely), the ultimate disposition of the fund would probably be distributed based on the value of the NAV.

      One person above worried about a NAV loss of about 13% in 2007. I believe that is not much different than the S&P 500 for that period. I expect that AOD's NAV will rise as the stock market recovers.

    • OK, I'm convinced. I have done some additional research about the dividend capture strategy and it can produce good returns. I guess it has something to do with stock price movements right around the ex-dividend date. It still does not seem logical to me, but maybe it is worth a try. Thanks for all your postings and your patience with me.

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