The Motley Fool Discussion Boards
Learning to Invest / Portfolio Management
|Subject: Re: dividends||Date: 11/20/2012 2:06 PM|
|Author: CABob||Number: 6654 of 6725|
It's a matter of personal preference. The primary reason to reinvest dividends is to "painlessly" grow your investment in a company.
OTOH I think the following considerations point out some downsides to dividend reinvestment.
In a taxable account it creates a number of purchase lots which may make for a more complex tax return when you sell some or all of an investment.
Putting the dividends into a sweep account allows you to make your purchase to whatever investment and at whenever time you choose rather than being tied to a specific stock on the dividend date.
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