How To Reinvest Dividends: To Each His Own

We all love dividends, and many of us love to reinvest them once we receive them. Reinvesting dividends can increase the size of one's portfolio significantly over the years, but there are debates about how to reinvest these dividends. Should someone reinvest the dividend as soon as receiving it, or should one wait for the stock price to fall in order to reinvest the dividend? What if the stock price is very high by the time the dividend is issued and one wants to wait till the price falls in order to reinvest? I looked at this case, using an example - AT&T (T). Let's say someone bought 100 shares of AT&T in 2002 and held onto those shares till today. Also assume that this person kept reinvesting his dividends as soon as he received them. Looking at the historical dividend rates of AT&T, this person's AT&T positions would keep... Read more

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