Typically when a stock hits it's ex-dividend date (the day after the last day to be eligible for a dividend payout) a stock will drop by an amount close to the dividend payout.
This makes sense, and as an investor it's not a big deal since you now have the same amount of equity, just some of it is converted to cash in the form of a dividend.
However, the dividend payout is a taxable event for investors. So if the stock is held in an account like a Roth IRA, that stock + dividend will end up with a higher post tax value than a normal investment account.
So theoretically, because of the taxes on dividends, is there a discount on stocks just before their ex-dividend date for tax sheltered accounts? Additionally, wouldn't the existence of qualified dividends make this "dividend harvesting" strategy even more effective?
And if so, are there examples of this investment strategy being used?
