I'm a new fool and recently setup my broker accounts and begun a portfolio of dividend paying stocks. I have elected to reinvest dividends, but is it better to have them put into the sweep account for possible use in other investments? - dhd101 | Date: 11/19/2012 5:29:32 PM | Number: 6654

I NEVER, EVER re-invest the dividends back into the company that just paid the dividend because by doing so implies that you believe that the company that just paid the dividend is the absolutely best investment you can make with the just distributed cash. That is simply almost NEVER the case.

I take the dividends in cash, let the dividend payments accumulate in a sweep account and re-invest the cash in the sweep account in the next value investment that I find in the marketplace for stocks.

Kahuna, CFA
Investment Professional
1974 - Present