The Motley Fool Discussion Boards

Previous Page

Motley Fool Pro / Pro: Catch-Up Trades


Subject:  Re: setup for dividends Date:  2/25/2013  1:11 PM
Author:  TMFFischer Number:  239 of 830

Hi proLon,

We do not automatically invest dividends in Pro. We don't want to end up with partial shares, or odd lots, beyond our control, since that makes it harder to use options on them. In my personal life, I also just accept dividends as cash, rather than buy partial shares automatically. Now, historically, reinvested dividends are great for your returns. So, you should be diligent to reinvest them yourself if you're not investing them automatically. For us, it's nice to have that choice of where we want to invest them; cash from dividends can also serve to support our put-writing strategies, which pay us better than a typical annual dividend in most cases.

So, short answer is: We don't reinvest dividends automatically, to keep our share count and actions clearer. But we like having the cash to put to work eventually. At home, if you don't care about partial shares, and just want to reinvest on auto-pilot with dividends, I would never say don't do it... But we won't in Pro for a few service reasons.


Copyright 1996-2022 trademark and the "Fool" logo is a trademark of The Motley Fool, Inc. Contact Us