Ok so just to clarify identifying certain lots of shares based upon their original purchase value is only important when selling, correct?
Correct. Well, it's also nice if you're doing your own calculation of your personal rate-of-return, but that's just a vanity thing.
I don't plan on completely parting ways with any of the funds anytime soon so am I correct in thinking that automatically reinvesting dividends won't make life too complicated?
Yep, I think automatically reinvesting would make your life *less* complicated, since then you don't have to figure out what to do with every dividend payment.
In my case, I make a purchase in my taxable account every two weeks. Since my funds (and your funds) only distribute dividends four times a year (at most), the
vast majority of tax lots in my account history are from new money rather than dividends. So the Bogleheads negative of "taking dividends in cash avoids creating a lot of small tax lots" doesn't make any sense in my case; the dividends have no substantial effect on the size of my transaction history list, because it's already quite large. Also, at this point with my relatively large account balance, my quarterly dividend payments are
larger than my biweekly contributions. So my dividend reinvestments are neither "small" nor are there "a lot" of them.