Is there a particularly good time to reinvest a dividend back into a company?
For example, Phoenix Group are going ex-div on the 11th. I already know im going to receive a modest £65.56 in May, which I plan on reinvesting in Phoenix.
I can wait for the dividend and then reinvest to buy 11 more shares in May or, as I have spare cash in my account, I could reinvest before ex-div. I’d still be buying 11 shares, but I will increase my dividend by £2.93 to £68.49.
Which way am I likely to be better off?
Purely IMO, there’s no gain in trying to time investments around dividends. When it goes ex-dividend the SP will likely drop by the value of the dividend.
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Yes, exactly what Richard said. Any other movement in share price is what would happen anyway.
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I have PHNX and similar stocks such as MNG. I tend to find that they rally before ex-div, drop by the div and the drift lower for a couple of months before restarting the cycle. Obviously markets,sentiment and news all affect prices, but IMO, 3 months after ex date is a good time to reinvest.
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I tend to use this format as well, but I re-invest dividends from other companies on the 3 month cycle. I.E Dividend in March… Look for the company which paid Dividend in Jan and buy them and on and on. Divi’s getting re-invested but not on the same day as everyone else is re-investing in that paticular stock (From Automatic Dividend Re-Investement)
Automated Dividend reinvestment never takes place on dividend payment date. (Whenever that might be on freetrade!)
Hargreaves Lansdowne for instance has a 10 day period every month in which it reinvests dividends.
The way it works it can result in as long as 5 weeks before your dividend is reinvested.
The one benefit of no fee investing is to pick your own time and share to invest in.
As stated above a rarely reinvest dividends into the same company. I don’t necessarily have a set plan. If something happens to have dipped without any information to support then I will buy.
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I’m a little undecided about dividend reinvestment.
Until now, I have chosen to reinvest as soon as possible in whatever’s looking cheapest in my portfolio.
But rather than look at Z-scores and suchlike, I’m considering whether to start reinvesting income in the same investment.
I think I would switch if I could reinvest automatically without a fee.
Looking to the long-term, I’d rather keep it simple.