The best argument in favor of the reinvestment of dividends—particularly pertaining to companies that you know will be bigger and stronger ten years from now—is that your money immediately is put to productive use. If you choose to pool dividends together for a separate investment at a later date while sitting on cash, you miss out on the dividends (and price appreciation, if any) that occur before you get a chance to put your cash to use.
The classic Benjamin Graham quote on this topic is this:
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“It is far from certain that the typical investor should regularly hold off buying until low market levels appear, because this may involve a long wait, very likely the loss of income, and the possible missing of investment opportunities. On the whole it may be better for the investor to do his stock buying whenever he has money to put in stocks, except