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No. of Recommendations: 3

I've used this example before;

1982 my father purchased 500 shares of BCTEL @ $6 each for a total investment of $3000. He did nothing more but let the dividends reinvest.

By 1998 Before BCTel merged with TELUS he had $850+ shares at $55 per. Total value = $47,650 with an annual dividend over $1200 per year now.

This represented a 19.2% annual return from 1982-1998. The dividend alone was now paying a 40% annual return on his original investment of $3000.

I'd say reinvest the dividends.

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