Dan Laub: Do you need the dividend income in the short-run?
JC Catalano: Is there a tax advantage to doing so? That is always my first question, especially if we’re talking about ROTH IRAs. I don’t want to pay the man if I don’t have to.
Milton T Eaton: Too many factors to answer that question
Nandy Colon: Exactly
Sam Smith: The idea is to reinvest and let it grow….overtime you’ll have did better than most every other investment imo.
Kris Christenson: You can use the dividends to compound at a quicker rate than the price by doing exactly that.
Shaun Mcghee: dis is what i got yesterday
Chris Brinkmeyer: How does it get reinvested if the divy is not enough to buy one share?…im confused on how that works..
Rich Buff: Chris Brinkmeyer Most brokers will buy fractional shares for you. For example, I have been “DRIPing” T for a while and I have 457.47 shares. (from 400 starting). I use Schwab and it’s free. And even though T is down a bit, those extra shares are compounding for me + I’m expecting a div increase soon.
Sue Weed: You don’t usually pay a commission on dividend and capital gain reinvestment.
Justin Erickson: No commission on Robinhood.
Sue Weed: Justin Erickson true but no partial shares either.
Justin Erickson: Yea, I’m hoping they allow partial shares in the future. There are also lots of stocks they don’t offer as well. For a casual investor like me it isn’t a huge problem. Low income so I tend to focus on the cheaper stocks. Going to slowly growing my portfolio and hopefully be able to have some extra cash in the future.
AJ Singh: From my experience, yes. Depending on your brokerage you don’t pay a commission to reinvest. You can set it up for automatic DRIP ( DIVIDEND REINVESTMENT PROGRAM). It would take a long time to accumulate dividend to buy shares, depending on how much you get in dividends. If you pull out your dividend you pay taxes. If it’s in a Roth IRA no capital gains or taxes when you start withdrawing after age 59 1/2. You can google stuff like this —–>. http://www.dividendgrowthinvestingandretirement.com/…
Pros and Cons of a Dividend Reinvestment Plan
Avi Tanny: If it’s a good stock it’s good to reinvest in any way
Shaun Mcghee: so reinvest the dividend payout of a $1.27
Avi Tanny: Depending on program you have or wait until it accumulates
Shaun Mcghee: the reinvest is free useing stockplie
Avi Tanny: I don’t see why not.
Eric Brooks: As long as you do your DD and invest in a great company its worth reinvesting divs. Heres JNJ charts with and without divs invested.
Avi Tanny: You’re damn right
Shaun Mcghee: nice
Helen Sriubiskis: It depends….It depends if the stock is at a good price or “on sale”. I recall that you’re just starting out. In this case, T is at an attractive prce level, so I say, yes, reinvest in T.
Shaun Mcghee: i did helen
Sven Carlin: If you want to grow your portfolio then reinvest, but I would reinvest the whole dividend in the cheapest stock in your portfolio at the moment.
Sue Weed: Then you will pay a commission if the dividend is reinvested in a different company than the one paying the dividend.
Sven Carlin: That is only if you use DRIP
Janeil Pierre: That’s an interesting approach, would like to hear why you say the cheapest and not the highest dividend paying company or the most expensive one.
Sue Weed: JLee Simone the rational is that your dividend dollars go further by buying the cheapest shares. I don’t do it that way myself. I Drip unless I have, in terms of portfolio balance, maxed out the position giving me dividends for now.
Sven Carlin: Perhaps this old video can help, bad quality but doing better now. https://www.youtube.com/watch?v=SGzgbPAzN38
Temporal diversification – diversify like Warren Buffett does
Janeil Pierre: Sven id give it a listen, thanks
Stefan Sharpe: I reinvest all dividends in all the companies I buy. One caveat is my portfolio is not risky so I am happy adding to these companies without having to worry about if they are going under or not
Robert Bartlett: If you deem the stock position a forever hold stock, and don’t have an immediate need for the income, then DRIP
Shaun Mcghee: thank yall for the great actvice i love dis group it help me alot
Connie Howell: While I respect everyone that says “reinvest” personally, I take the opposite stance. lol While reinvesting can be an easy way on the front end to make money, it becomes an accounting nightmare when you sell, or want to move your stocks, and have to account for each and every one of those fractional shares. For me, I choose to take the cash payouts and use that money to buy something, perhaps the same stock, when the price is low.
Sue Weed: I use Fidelity and had no problem transferring accounts from Vanguard and Morgan Stanley. I have always dripped dividends and they (Fidelity) took care of all that accounting without any problem.
Janeil Pierre: It all depends on why you’re investing, or in what type of account. For example I’m investing in my Roth IRA which as you know is a non taxable account and I’m investing for my retirement. In this case, because I’m investing for the long haul (25+ year…See more
Mestizo Tabian: Shaun that Microsoft and Ford I told you to buy last month is looking pretty good right now.
Shaun Mcghee: u rite to i got some share in ford
Bob Stag: Well, depends on how much you are making in dividends. If small amounts, re invest in the company that paid the dividend, usually, and in my case no cost. Some companies pay out enough to me, that I let it accumulate in my cash account for other purchases as markets determine.
Stephen Wallace: Absolutely, only reason I can see not to is if you are retired or unable to work and need the income. If you don’t feel comfortable reinvesting it maybe you shouldn’t own that stock.
Shamari Robinson: Compounding is the 8th wonder of the world if something is growing exponentially, even if you start with a small amount it will compound on itself, you can mathematically see this happening, p(1+r/n)^nt
Nikhil Doshi: I have long history of dividend reinvestment in mutual funds and results are astonishing. One example I invested in fidelity OTC fund $ 5000 in my IRA in 1985 reinvested all these years did not add any more money now after 30 yrs it is more than 100000
Shaun Mcghee: wow nice nikhil doshi
Robert Kovacs: Einstein said “Compound interest is the eighth wonder of the world. He who understands it, earns it … he who doesn’t … pays it. Compound interest is the most powerful force in the universe. …See more
David S.H. Nicholson: Excellent strategy for certain stocks like BCE. No transaction charges and some offer DRIPs at a discount…✅
Janeil Pierre: Who charges for DRIP? I have a Roth and a regular brokerage account and don’t pay to DRIP
David S.H. Nicholson: My point is that some DRIPs provide a discount on stock purchases with reinvested dividends…
Janeil Pierre: Oh! I thought you meant a discount on fees paid to drip. My apologies.
David S.H. Nicholson: No problemO ✅
Floyd Saunders: Yes. That’s result in compounding of your invest and is one of the keys to financial wealth.
Jeremy Lvancevic: Ok there is a lot of misinformation on here, and that’s why questions like these need to only be answered if you 100% know the answer, not your best guess. But you don’t HAVE to DRIP your stocks in order to avoid taxes. If you let the money just go to your account balance, you can buy more shares of OTHER companies and not risk an unbalanced portfolio or other buying opportunities. In other words, you can use the dividends to essentially have larger “deposits”. Remember, you only get to add $5,500 (most people) a year, which isn’t a lot of new buying power.
Michael Morse: Why wait 3 months for your next divy collection? Reinvest it in another stock you own that it getting ready to have it’s ex date.
Connie Howell: That’s an awesome idea!