Reinvesting Dividends

Investing and Markets 📈
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Hi there,

Been investing for 3 months so just getting dividends coming.

My question is do I reinvest in the stock that pays the dividend or my portfolio to have the best outcome.

I have 10 stocks in my portfolio and am looking at 10+ year plan so want to get it right at the start.

thanks for your help

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What I do personally (and this is not advice from me to you) is that I try to reinvest the divi in the same company from whence it came. However, there are a couple of caveats to that:

  1. I check whether I still feel that company is a good place for my money

  2. It may be that the divi isn’t enough to buy a new share (in companies where you can’t buy fractionals) so the question then becomes a bit more complicated. In this case, I look for the next best thing that is low enough in price to match the divi in my portfolio, then if that doesn’t work, I look at my watchlist.

  3. You could keep the divi as cash until the next divi payment too, or until you top up your account to be able to buy a whole share.

Hope that helps

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thanks for your input, greatly appreciated

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I like dividend stocks for a couple of reasons, firstly instead of automatically investing the money back into the stock it came from it allows me to decide myself where to put it and secondly because it does motivate you somewhat if you see money coming in, even if other parts of your portfolio are going down.

I do similar to TheRaven except that I skip step 1. I simply add whatever money I have in dividends to the pool of money from which I make new purchases, then I check my watchlist for whatever seems like the best buy at the time and invest where I think it makes most sense.

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I try and do the same as @TheRaven @1anrs but I end up bring my company’s that are in the red little less in the rest! :rofl::rofl::rofl:

So I’m still reinvesting but at my own choice and leisure, never taken the cash divi out of the platform

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