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Author: kahunacfa Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 8740  
Subject: Re: TD Ameritrade Dividend Reinvestment policy Date: 5/31/2006 9:05 AM
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Help, I'm worried about my dividend reinvestment

I have been a long time TD Waterhouse customer with a regular individual account and Roth there. I had just found out about their dividend reinvestment policy when they announced that they were merging with Ameritrade. The old TD Waterhouse allowed you to reinvest dividends no matter how small the amount and would buy fractional shares. I love this service and would very much like to use it for the rest of my investing life.

The problem is that to reinvest dividend in the new TD Ameritrade accounts you have to have enough dividends to purchase a whole share of whatever company issues the dividend. I learned this when I recently rolled over my 401k plan to a traditional IRA that was setup under the new rules.
- FedtheFoot | Date: 5/31/06 3:05 AM | Number: 2405

I do not ever re-invest the dividends that I receive in stocks held in my IRA account in the same company that paid the dividend. I let the cash dividends accumulate and buy the best stock that I already hold, or invest the cash in my best new stock idea. Using this proceedure, my IRA has generated a 24.2% compound annual rate of returm from when I started it, with a $2,000 tax-deductable, contribution in 1980 through year-end 2005. Some of the new stocks that I have been buying recently, one for less than cash per share, do not pay a dividend.

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