03-20-2021, 08:05 AM
(03-20-2021, 07:48 AM)ken-do-nim Wrote: Great article Eric. Once trades became commission free; directed reinvestment became a great option. However, what I've been finding tends to happen is the "discipline factor". Let's say I get a few dividends, and my cash is up to $150. I will probably choose a stock that's $120 and a stock that's $30 and go right back to near zero in the account. But some of my stocks that are $300, $400 a share are much harder to reinvest into this way. It takes discipline to wait for the dividends to accumulate enough to buy a share of the higher priced stocks.
Therefore, what I've been thinking of is a synthesis of the two strategies. The pure income producers like T, NLY, ORC push their dividends into the pot, whereas the high priced dividend growth stocks like AVGO ($474) and SHW ($706!) keep reinvestment on.
Yeah, I've noticed that already, and I just started directed reinvestment last month.
I wanted to add HD on its recent dip and get it before the ex-div, but due to its high share price, I wasn't able to build up enough cash in time. I still did add it, but missed out on the quarterly dividend and paid a few more dollars for the shares.
I agree it will take some discipline to let cash build up enough for the higher dollar stocks. Hopefully, it doesn't lead to adding to losers rather than winners in the portfolio.