automatic dividend reinvestment

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Automatic Dividend Reinvestment

A practice or agreement in which dividends on a security are used to buy more of the same security, rather than disbursed to the investor in cash. Automatic dividend reinvestment is relatively common in mutual funds; investors agree to use dividends and other capital gains to reinvest in more shares of the mutual fund. While this involves assuming more risk in the mutual fund, it carries the possibility of higher returns.

automatic dividend reinvestment

References in periodicals archive ?
Vanguard, in a note it posted for ETF and fund investors, advises that investors who are comfortable with their investment plans stick with those plans, including regular investments through payroll deductions, automatic investment plans, or target-date funds.
ShareBuiler is an online brokerage specializing in automatic investment plans.
Get started with automatic investment plans, tax-favored savings and retirement accounts, and other convenient and rewarding ways that can make your net worth grow.
A: In the past, I've always recommended automatic investment plans with mutual fund companies.
Automatic investment plans, as they are often called, require a minimum initial investment as long as you agree to have a set amount withdrawn from your checking or savings account.

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