Author Topic: What do you do with dividends from old stocks?  (Read 583 times)

vinnybagodonuts

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What do you do with dividends from old stocks?
« on: January 29, 2020, 09:01:24 AM »
Slowly consolidating toward a concentration in index funds, was wondering what to do with old dividends? I have many solid companies and have been reinvesting, but now thinking maybe it would be better to only reinvest in index funds. Or leave in cash for dips?

Rob_bob

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Re: What do you do with dividends from old stocks?
« Reply #1 on: January 29, 2020, 12:47:47 PM »
You can do whatever you want with them of course  :)

I have a mix of index funds and individual stocks.  Some I reinvest, i.e DRIP, others I take as cash to reinvest them in other holdings.

terran

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Re: What do you do with dividends from old stocks?
« Reply #2 on: January 29, 2020, 01:19:59 PM »
I don't have any old stocks, only index funds, but if I had an investment I didn't want more of (old stocks) and another I did want more of (index funds), then I wouldn't be buying more of the investment I didn't want via dividend reinvestment, I'd be taking the dividends as cash and buying the  investment I did want. There's nothing special about dividend reinvestment other than it happening automatically, so better to redirect that income to what you want to be buying.

Stimpy

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Re: What do you do with dividends from old stocks?
« Reply #3 on: January 29, 2020, 03:57:29 PM »
I don't have any old stocks, only index funds, but if I had an investment I didn't want more of (old stocks) and another I did want more of (index funds), then I wouldn't be buying more of the investment I didn't want via dividend reinvestment, I'd be taking the dividends as cash and buying the  investment I did want. There's nothing special about dividend reinvestment other than it happening automatically, so better to redirect that income to what you want to be buying.
This.

If you still feel the stocks you have are worth having (nothing wrong with that) but want to start indexing, I think redirecting the drips to an index fund of your choosing is a wise choice.

chasesfish

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Re: What do you do with dividends from old stocks?
« Reply #4 on: January 30, 2020, 09:11:02 PM »
I go back and forth about this.

Eventually you want to turn off dividend reinvestment on the old stocks an redeploy the cash into the index funds.

Also look at capital gain harvesting to see if you can sell anything at a 0% tax rate (depends on AGI)