Questions tagged [dividend-reinvestment]

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Price on dividend reinvestment

I started doing dividend re-investment and as my spouse's brokerage account was at a different brokerage, so I noticed the different price for same ETF e.g. QQQ. One of the brokerage gave reinvestment ...
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15 votes
7 answers
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If an investor does not need an income stream, do dividend stocks have advantages over non-dividend stocks?

My limited understanding is that a stock's share price typically goes down on its ex-dividend date by the amount of the dividend. If that's true, why are dividend equities generally considered good ...
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12 votes
1 answer
1k views

How can stockbrokers be so cheap in the U.S.?

How do stockbrokers in the U.S. manage to be so cheap? In Germany, I know a few brokers but at most of them, the cost of an order is over 5€ (approx. 6$) every time. In the states, you have brokers ...
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  • 223
11 votes
2 answers
1k views

Why don't all dividend-yielding companies offer dividend reinvestment plans (DRIPs)?

My uneducated guess is that dividend reinvestments seem to be a win-win situation between companies and shareholders. As a result, I wonder why some dividend-yielding companies do not offer dividend ...
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1 vote
3 answers
302 views

If an ETF directly reinvests its money back in to itself, does the "compound interest" approach to shares still apply?

The idea of investing in ETFs was given to me as follows, I'll call this the "compound interest approach": Historically speaking, unless you can time the market very well or have a very ...
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1 vote
1 answer
216 views

If an investor wants to reinvest dividends, aren't stock dividends better than cash dividends?

When a company pays a cash dividend, the shareholders may need to pay income tax on that dividend. If a shareholder always wishes to reinvest the dividends, cash dividends have a few disadvantages: ...
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17 votes
5 answers
5k views

If your plan is to reinvest dividends, wouldn't you rather the company not pay dividends altogether?

Case 1: XYZ pays a dividend. We reinvest all dividends back into XYZ Case 2: XYZ does not pay a dividend In Case 1, you end up with more shares of XYZ than Case 2, but the shares will be worth less ...
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  • 272
4 votes
2 answers
285 views

Does dividend reinvesting influence the price?

A dividend paying asset pays a dividend on a specific date. When brokerages auto-reinvest these proceeds (DRIP), won't that influence the price (assuming that it's a market order)? In other words, ...
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  • 1,226
3 votes
2 answers
546 views

If a bond index fund's income is re-invested, how can it be a fixed income asset?

Looking at a bond index fund Key Investor Information, I have found this: Income from the Fund will be reinvested and reflected in the price of shares in the Fund I don't fully understand it. As ...
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  • 1,179
1 vote
2 answers
177 views

How do ETF commissions work?

Let's suppose that I live in the UK, and that I have £10000 invested in Vanguard's VUSA. This ETF has an ongoing charge of 0.07%. This, added to the 0.15% account fee, it's a 0.22% total. That means ...
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  • 1,179
0 votes
1 answer
66 views

Is there a UK investment brokerage allowing purchase of fractional shares / dividend reinvestment with low fees? [closed]

I am a UK resident looking for a stocks and shares brokerage for long-term value-investing. I am currently working with limited money for investing so am saving until I can buy complete stocks using ...
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1 vote
3 answers
3k views

How much money do I need to generate $1500 per month in dividends for the rest of my life? [duplicate]

I am 29 years old. I do freelance work and I can save around $500/Month from that. In my country, $1500/month is more than enough to cover all living/health/entertainment expenses for me and possibly ...
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1 vote
1 answer
77 views

Shares bought in a dividend reinvestment plan, where do they come from?

I just received a notice that my dividend was used to purchase and additional 5 shares in the the ETF. Since there are only a limited amount of trade-able units, where did these additional 5 come ...
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0 votes
2 answers
241 views

How inflation affects returns and dividends

How inflation is linked to returns AND dividends? We know that adj returns are (1+return)/(1+inflation) -1 But how do we account for dividends? Suppose: 10% annual return 3% inflation 4% dividend ...
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  • 21
2 votes
1 answer
1k views

Does reinvesting dividends after selling for a loss cause a wash sale? [duplicate]

I sold some fund shares with high turnover on my personal investment account with the intent of buying something similar later on my IRA account. However, after I sold (and within 30 days), I ...
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  • 303
1 vote
1 answer
79 views

Dividend from ESOP to Cash - India

I'm Indian and working for a US organisation in India. I have been investing in the Employee Stock Purchase Plan (ESPP) for a while now. During the initial investment period, I had not opted for re-...
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2 votes
2 answers
453 views

How to chart what a mutual fund or ETF will return if dividends are reinvested?

When looking at financial charts like bigcharts.com, the chart shows closing price (or OHLC) for each day. This shows growth (or decline) of the equity if dividends are not reinvested. But what if ...
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0 votes
2 answers
571 views

Do SPY prices include dividends?

I'd like to calculate the return of SPY over a range of time. For example: 5/1/18: 264.98 9/14/18: 290.88 264.98 - 290.88 = 25.9 25.9/264.98= 0.0977 = 9.77% Does the 9.77% return include SPY ...
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  • 1,398
1 vote
3 answers
220 views

Keeping track of "out of pocket" cost basis

Dilemma I have some criticism about the cost basis reported on brokerage websites. It isn't your out-of-pocket cost basis. It accounts for reinvested dividends. As a result, the gain/loss number ...
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7 votes
3 answers
315 views

What do mutual funds do with the dividends that the securities that they contain give out?

For example, Vanguard Dividend funds have a lot of stocks that give out dividends. Are there any regulatory requirements for Vanguard to distribute the fund? Can they decide to do whatever they want ...
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  • 171
2 votes
1 answer
495 views

DRIP Vs. Cash Dividend in a taxable account - Which one is beneficial from the tax perspective?

I believe dividends are considered as an income and if you reinvest using DRIP it won't be income but capital gain later when you sell the stock? What are some advantages and disadvantages of doing ...
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1 vote
1 answer
88 views

Indian Mutual Funds

I am new to Stock Markets. I have interests to invest my savings on Mutual Funds. When I looking for Higher Return Mutual Fund securities, I have seen some information there. For Example, I am ...
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1 vote
2 answers
794 views

Why is there less buzz around IEP (Carl Icahn) than BRK.B (Warren Buffett)?

IEP is 95% owned by Carl Icahn. It most certainly passes the Skin in the Game principle Nassim Taleb likes to talk about. I happen to own a couple of shares in it because of the man's incredible ...
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0 votes
1 answer
40 views

Is high liquidity required to fulfill DRIPs?

With DRIPs you get equity instead of cash, but where is this equity coming from? If it's from the existing market then what happens in low liquidity situations?
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  • 508
2 votes
0 answers
142 views

What does "No Sweep" Mean in Citibank Context

I am in the process of opening Traditional IRA account with Citibank (currently have checking and saving account at Citibank) Purpose is to purchase ETF for long-term. Form has section to determine ...
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  • 287
5 votes
1 answer
98 views

Are DRIPs subject to a settlement period?

Are DRIPs subject to a settlement period (e.g. T+2)? Does the answer depend on whether the dividend reinvestment accounts for complete shares vs only fractional shares? Are there any time ...
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  • 1,199
7 votes
2 answers
2k views

How to automatically reinvest in non-dividend paying funds

I've read Einsteins quote stating "The most powerful force in the universe is compound interest." However, everywhere I read this is basically only possible with dividend paying stocks and then ...
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  • 215
24 votes
5 answers
6k views

Dividends - Why the push to reinvest?

I recently received an email from my brokerage (UK based) stating: "Research from Barclays shows that without dividends, £100 invested in the UK stock market since 1899 would have grown into just £...
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4 votes
4 answers
3k views

Dividend vs Growth Stocks for young investors

I am a young investor (24 yo) with a stable income and would like to know which long-term investment plan would be more appropriate for people around my age and why: Growth Stocks or Dividend Growth ...
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-1 votes
1 answer
267 views

Meaning of reinvestment

Is it correct that stocks and mutual funds can distribute dividends and capital gains automatically without account holders' intervention, and then reinvest the distributed to buy new shares? From ...
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5 votes
1 answer
618 views

Missing 401(k) dividends

I have a 401(k) with a gigantic, global, US-based company. The funds available to me include a variety of non-tickered funds — meaning that there's no symbol I can independently research — such as ...
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2 votes
4 answers
3k views

What is the difference between a scrip dividend and a stock split?

Definitions of both scrip dividend and share split gives the same meaning. What is the difference between a scrip dividend and share splits?
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9 votes
5 answers
22k views

ETF S&P 500 with Reinvested Dividend [closed]

All ETFs tracking the S&P 500 Index I know (SPY, VOO, IVV) pay dividends several times per years. Is there any ETF that tracks the S&P 500 Index but instead of paying dividends they reinvest ...
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2 votes
1 answer
144 views

Taxes on qualifying dividends when reinvesting

I put all my investment money in a managed account with Chase Private. The account is set up to reinvest all dividends, capital gain distributions and interests my stocks/mutual funds/treasury funds ...
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1 vote
1 answer
1k views

Are automatic Dividend Reinvestments (DRIPs) subject to Redemption Fees?

It's the end of 2015, and most mutual funds are paying out their annual dividends, which I have enrolled in DRIPs (dividend reinvestment programs). Since a "DRIP" transaction is similar to purchasing ...
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2 votes
1 answer
119 views

Why do dividend reinvestments not match my calculator?

I've seen this occur numerous times in my IRAs. In the transaction section of my Fidelity IRA, it shows a line item Reinvestment XXX with a dollar amount. Clicking the details will display the ...
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1 vote
1 answer
184 views

Selling non-dividend for dividend stocks

H all, Few years ago , I received from my previous employer several hundred RSU, all managed by ETrade. since then all have already got Vested. I never sold neither bought any, in other words, I ...
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  • 129
2 votes
1 answer
218 views

Can a dividend reinvestment plan (DRIP) and share purchase plan (SPP) be used with a TFSA?

Can I put Sun Life (SLF) shares into a dividend reinvestment plan (DRIP) and share purchase plan (SPP) plan, and then put into a TFSA investment account for a family member, 5 to 10 year term?
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5 votes
3 answers
303 views

Wouldn't it be better if reinvested dividends were simply treatable as capital gains for tax purposes?

Suppose I own 100 shares in XYZ corp purchased for 25c in year 2000. If XYZ corp pays me 5c in dividends in year 2001, I will owe tax on the 5c dividends, hopefully as qualified dividends(?). If on ...
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2 votes
2 answers
186 views

Index ETF or Index mutual fund - standard brokerage account

If I plan to hold an asset for 10 years, the asset is offered as a mutual fund and an etf, with the same 0.25% fee, and quarterly dividends of 100.00, from a tax and reinvestment standpoint, which ...
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1 vote
1 answer
83 views

Is there a way to avoid short-term capital gains taxes on bond funds?

It appears that most bond ETFs pay out monthly distributions from interest earnings. Is there a way to directly reinvesting the earnings on the fund without triggering a taxable event? Are there any ...
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0 votes
2 answers
132 views

Different avenues of tangible returns from index funds and bond funds

I am a beginner investor and I've been out of school at this point having saved enough to seriously look at where I am investing my money. I have decided to start off with a portfolio that is ...
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  • 1,235
2 votes
5 answers
2k views

What's the difference between a high yield dividend stock vs a growth stock?

I'm new to investing and still learning my way. What's the difference between a stock that stays relatively stable during good and bad times and returns a high dividend vs a stock that is supposed to ...
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  • 533
-2 votes
1 answer
651 views

Which of these unrealized profit calculations is correct? And, why other calculations are wrong?

Which of these unrealized profit calculations is correct? And, why other calculations are wrong? @ $10 per unit, $1000 - Subscription (100 units) $0500 - Cash dividend (50 units) $0500 - Reinvested ...
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  • 193
1 vote
1 answer
240 views

Taxation on DRIPs in Canada

I am starting to invest in DRIPs, as I believe they would be the best investment for me at my current point in life. I am reading some other questions here, and people are stating that the income, ...
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4 votes
1 answer
6k views

Chart total return of mutual fund vs. stock with dividends reinvested? [closed]

Using common charting software, how can I best compare total returns of a mutual fund vs. total return of a stock, with dividend reinvestment (DRIP) in each case? Frequently the easy to get charts ...
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  • 2,420
2 votes
2 answers
4k views

Wash sale rule with dividend reinvestment

Let's say I buy some stock. Two weeks later it pays a dividend which is reinvested in fractional shares of the stock. The next day I sell all shares at a loss. Would this be considered a wash sale? ...
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  • 14.6k
0 votes
1 answer
304 views

Is it possible that for shares to be reinvested in a stock you already sold?

I just recently set my taxable investment account from reinvest dividends to deposit in cash. However, there seems to be a delay (I assume related to one of the various dates associated with dividends)...
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  • 14.6k
2 votes
1 answer
831 views

Why do many British companies offer a scrip dividend option in lieu of cash?

Some stocks like GlaxoSmithKline, HSBC, Tesco, Unilever all offer dividends every quarterly/yearly, with the option of scrip dividend (opting to use the dividend to purchase shares). Why would ...
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  • 169
3 votes
2 answers
4k views

Concerning ETF that do dividend reinvestment for you. Is that taxable?

My understanding that when you purchase an ETF, you technically own your portion of the underlying holdings. (This is the reason commodity ETFs are taxed like commodities.) Per the below an ETF may ...
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  • 1,099