as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.
system
what prevents investors from buying high yield stocks and selling them as soon as their dividend is paid out?
user
this investment strategy may have tax advantages. in some countries, income received from dividends is taxed as income, whereas profits on share trades are capital gains. if you have already exceeded your tax-free income limit for the year, but not your capital gains tax allowance, it may be preferable to make a dealing profit rather than an investment income. these arrangements are called a bed-and-breakfast.
assistant