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Dividend reinvestment definition
Dividend reinvestment means reinvesting dividend payments from stocks you hold back into your stock or investment portfolio rather than spending them. This may involve taking the dividend paid by each individual stock and using it to buy more shares of the same stock, or may involve buying other stocks or assets as part of a portfolio to help spread the risk. By reinvesting dividends, an investor could benefit from increased value growth from his or her increased stock holdings as well as increased dividend income from subsequent dividend payments.
Dividend reinvestment definition
Dividend reinvestment means reinvesting dividend payments from stocks you hold back into your stock or investment portfolio rather than spending them. This may involve taking the dividend paid by each individual stock and using it to buy more shares of the same stock, or may involve buying other stocks or assets as part of a portfolio to help spread the risk. By reinvesting dividends, an investor could benefit from increased value growth from his or her increased stock holdings as well as increased dividend income from subsequent dividend payments.
Many large listed companies offer dividend reinvestment plans (DRIPs) which automatically buy new shares with dividend payments on behalf of the investors. Under such plans, cash may be carried forward to subsequent dividend payments if there isn’t enough to buy new shares at the initial payment date, or an investor may be given fractional shares.
IG Smart Portfolios
Invest in an expertly managed portfolio, at a fraction of the cost of traditional wealth managers and independent financial advisors (IFAs), with an IG Smart Portfolio.
The value of shares, ETFs and ETCs bought through a share dealing account, a stocks and shares ISA, a SIPP or an IG Smart Portfolio can fall as well as rise, which could mean getting back less than you originally put in. Spread bets and CFDs are leveraged products and can result in losses that exceed deposits. Spread betting and CFD trading are not permitted within the IG SIPP. Please ensure you fully understand the risks and take care to manage your exposure.
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