Dividend Reinvestment Does Not Have To Be All Or Nothing

If you are a regular reader of finance articles, you probably know that one topic which many writers beat to death with a brickbat is the strategy regarding dividend reinvestment. Generally, there are two camps: one argues for the reinvestment of dividends back into the company that pays them, and the other side favors the accumulation of dividends into a general pile until it becomes sizable enough to fund a new investment in its own right (and in the early stages, usually this is accompanies by the infusion of fresh cash from your labor as well).

The rationale behind reinvesting back into the same company is that it is easy, automatic, free (you have the wrong broker if it costs you anything), and permits an investor to see his holding size increase without any additional effort whatsoever on his part.

The rationale behind pooling investments together is this: when we … Read the rest of this article!