Is it a good idea to reinvest dividends?
Asked 4 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.
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