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Author: EGUSC Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 120805  
Subject: Re: selling a portion of stocks Date: 1/30/2002 6:04 PM
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Dividend reinvestment is just a bad idea (in my opinion - see below for my ranting and raving).

If you were to sell all your shares you add up the original cost plus every quarterly dividend you received over the years. Just enter that amount in the cost basis column.

If you have many share splits with dividend reinvestment and want to sell part, its very confusing and time consuming. Some of the reinvested dividend will have split once, some twice and so on. The IRS wants you to sell the share you purchased first but you can elect other methods that might save money but can be more complicated.

Now my soapbox:

Dividend reinvestment causes extra recording keeping and forces you to buy stock when they're maybe other better investments available. Just because a company is a good buy today does not mean it's a good buy every third month. But I am not part of the current investment fad of long-term only and don't worry about valuation. If you can't place a fair market value on a stock don't buy it ever and only buy when the fair market value is less than the current price.

I also think buy and hold or the newer version buy to hold is a poor message to send. Buy to monitor the financial condition of the company and sell accordingly, while long and not very catchy is a better message I think.

Good luck, EG soon to be history in 12 days.
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