IB: Auto dividend reinvest...?

Hi there

IB lets you enable an “auto dividend reinvest” option (with fractional shares)…

What are your thoughts about it? Pro? Contra?

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If the dividend is small, 1 USD for the transaction can be a big expense. This would depend of your portfolio.
Some taxe softwares don’t support fractionnal share.

Contra:

  • extra fees i believe
  • tax program

Pro:

  • life gets a little bit easier

I think if you are in an accumulating phase and invest anyway regularly (month - semester) fresh money it is not worth it.

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Dividend help a bit for rebalancing (might avoid selling stock).

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@clon no need for auto dividend reinvest if you regularly (e.g. monthly), like a good mustachian, buy your favourite ETF(s).

This means that next time you buy your ETF(s) you can buy a bit more than usual…

2 Likes

The same here. I don’t like to automatically reinvest dividends, and I prefer distributing funds, for this reason.

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