09-01-2019, 12:38 PM
(This post was last modified: 09-01-2019, 12:40 PM by crimsonghost747.)
I'd say the main thing here is costs, and tax being the biggest part of cost.
If you can directly reinvest without having to pay tax in between, then it's of course the smart way to do it if you have any sort of taxes on the cash distribution. You also have to factor in the commissions and the time you are using... I remember someone here recently saying that he has 90 stocks in his portfolio. If they all pay a quarterly dividend then that is 360 dividends per year. If it takes 5min to manually reinvest,(logging into the platform, checking the price etc) that is 30 hours spent.
Personally I take all of it as cash. Doesn't change anything for taxes and my commissions are around $1 anyway. It does stay on my investment account and I do reinvest it manually into whatever I feel like is decently valued at the time.
If you can directly reinvest without having to pay tax in between, then it's of course the smart way to do it if you have any sort of taxes on the cash distribution. You also have to factor in the commissions and the time you are using... I remember someone here recently saying that he has 90 stocks in his portfolio. If they all pay a quarterly dividend then that is 360 dividends per year. If it takes 5min to manually reinvest,(logging into the platform, checking the price etc) that is 30 hours spent.
Personally I take all of it as cash. Doesn't change anything for taxes and my commissions are around $1 anyway. It does stay on my investment account and I do reinvest it manually into whatever I feel like is decently valued at the time.