Friday, 9 October 2015

Market up..shd i wait or just reinvest my dividends?

My ans: reinvest

Why?

1) no one knows where market heading. ...go to 3200 next 2mths??? Or go to 2800 again next 2 mths. Who knows? Maybe it will go higher and one can buy less with that dividend received.

2) reinvestment would mean exchange cash for income producing equity. Cash is just cash. It cannot create more cash by itself. Over long term, the earlier one invest it, the more pronounced the compounding effect.

6 comments:

  1. Hi Paul

    You have proven with your strategy. Keep it up ;)

    ReplyDelete
  2. Hi B, i hope so.
    In addition the act of reinvestment simply also implies that i am actually doing something every mth. So not all that passive.
    Cheers!

    ReplyDelete
  3. Hi Paul,

    You are right. Nobody knows for sure what will happen next week, next month or next year. So, we need to keep re-investing to take advantage of the compounding effect over the long run.

    Having said that, we still have to be prudent in our stock selection. We must never re-invest just because we dun want cash to be sitting in the bank account.

    ReplyDelete
  4. Hi dividend knight,
    Thats very wise saying.
    Thanks for dropping by.

    ReplyDelete
  5. Hi uncle,
    U r rite.
    The things i consider in particular.
    1. Which counter gives more yield n margin of safety
    2. Which quadrant or mth in particular is weaker and needs to be strengthened with dividends.

    ReplyDelete
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