This is what the trading game looks like in my mind for PCI and PDI. I plan to start using this approach every year that PCI and PDI payout a special dividend in the month of December.
You should know that both of these funds are heavily invested in Mortgage Backed Securities (MBS).
The special dividend payout has been decreasing in recent years, especially for PDI.
While taking a look at the charts for PCI and PDI I noticed an extremely interesting play on special dividend capture selling for these two stocks that occurred last year in December, as you can see the price of PCI plummeted but NAV only dropped slightly in comparison:
It would appear to me that the best approach to reinvesting dividends in PCI and PDI would be to keep your current positions in these stocks and accumulate the distributions pooling them for later deployment at this point in the year (9/8/19). Then if we see a large selloff as a result of the special dividend capture then we can take advantage of the buying opportunity for a great set of funds that has a great yield come the December time frame. I would then reinvest the distributions until the end of June (roughly half of the year) and then pool the distributions again in anticipation of the large special distribution capture selloff come the December 2020 time frame.
Please note that this only occurs when there is a special dividend of notable size, in 2017 there was no sizable special dividend distribution:
PCI – Buy13 3rd Quartile Gain = 34.92%
PDI – Buy13 3rd Quartile Gain = 40.38%