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Anonymous
How do you reinvest your dividends from stocks? Do you still have to make another trade on the same stocks with the dividends collected by doing it manually and incur trading fees? Thanks.
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Yes, the dividends credited to your bank account are in cash, to reinvest the dividends you have to make another trade.
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Billy
19 Jan 2020
Development & Acquisitions Manager at Real Estate Private Equity
It would be good to have a service that automatically reinvests dividends but unfortunately, I don't think theres one present in the market. And contrary to suggestions on how you should reinvests dividends, unless your dividends adds up to thousands, reinvesting dividends whilst incurring commission costs isn't very worth it.
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Cash dividends are given in cash, so you will need to buy in yourself.
Unless the company offer you discount to purchase as option, you will need to manually buy in.
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Cedric Jamie Soh
22 Dec 2019
Director at Seniorcare.com.sg
Yes you have to receive the dividends.
Then manually buy new stocks.
My suggestions is to just do ...
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This depends on:
-the absolute value of the dividend sum
-the price of the equity you would like to
buy again
-the brokerage fees (0.00 USD, f.ex. already with TD Ameritrade or Charles Schwab)
-your acceptancw of relative cost level(commission fee as percentage of trading value)
-your expected average capital growth rate of that equity (that if course you will never know for sure for the future)
Commission fees of up to 0.25% are maybe already expensive by modern standards, but an acceptable number, if you take a longterm Buy&Hold approach.
Otherwise You could wait a bit and aggregate different dividends together.