Investing Tips for Millennials - Reinvest Dividends
Dividend reinvestment is a systematic method of accumulating shares of a stock that pays a dividend. With a dividend reinvestment program you automatically purchase shares each time that you receive a dividend. Over many years shares add up and increase your returns without laying out new money.
Many investors use dividend reinvestment as part of a long-term buy-and-hold investment program.
Use the Dividend Reinvestment Calculator to compare the future value of an investment with and without dividend reinvestment.
Setting up Your Dividend Reinvestment Account
You can use a full-service or Internet broker. Most brokerage firms let you reinvest dividends for the stocks you own in your account. Ask your broker for details.
You can buy stocks directly from a company if it offers a direct stock purchase and dividend reinvestment plan. Or you can use services offered by directinvesting.com, Global BuyDIRECT and Buy Stock Direct.
Always inquire about the fees associated with reinvesting dividends because some plans charge hefty fees.