Is it a good idea to reinvest dividends?

Asked 3 years ago

I have invested in a fair amount of dividend-paying stocks, and I'm wondering if it would be a good trading strategy to reinvest them and build up my portfolio that way?

Andrew Moran

Monday, October 18, 2021

If you are investing in these dividend-paying stocks for the long-term, it would be a good idea to reinvest the dividends.

Of course, it also depends on how much you own. If you possess a few shares, earning you $5 each quarter, you might as well transfer the funds to a savings account or buy fractional shares of expensive stocks you have been watching.

That said, if you own a large number of shares in these types of investment securities, you should sign up for a dividend reinvestment plan (DRIP). This allows you to reinvest cash dividends into additional shares.





Write an answer...

Cancel

Please follow our  Community Guidelines

Can't find what you're looking for?