In a weakening market, the share price tends to drop more than the dividend when a stock goes XD. This is especially true for high dividend stocks. So, it is a question of whether you want to keep the stocks over a long time (especially for those who do not have time to monitor), and be prepared to ride through the storm due the falling stock price after the stock goes XD. If you are not prepared for it, and then maybe it is good to sell before it goes XD and the buy it back again once it goes into XD. However, be mindful of the sell and buy brokerage. It may not be worthwhile after considering all the costs.
It is not a question of FA or TA, but a market psychology. After all, there is no incentive for people to hold the stock after the stock dividend is distributed.
(Brennen Pak has been a stock investor for more than 26 years. He is the Principal Trainer of BP Wealth Learning Centre LLP. He is the author of the book “Building Wealth Together Through Stocks.”) – The ebook version may be purchased via www.investingnote.com.