<center>https://habarinetwork.com/wp-content/uploads/2018/07/div.jpg</center> <br/><h3>Playing the long game</h3>

If you ask any expert about a way to build wealth through the stock market, they will all tell you that you need to buy quality stocks and hold on to them for the long run. If you're talking to a savvy investor they may even recommend some ways to take advantage of the power of long term investing. Many investors have at least part of their portfolios aside for what is called dividend reinvestment.

When you create a dividend reinvestment plan you are basically ensuring that the profits from your dividends or put towards buying more shares  and increasing the size of your portfolio. This is not something that you have to do yourself it is possible to setup dividend reinvestment plans through your brokerage in most cases. Doing it this way makes it so bad reinvestment is worry free and you can reap the benefits automatic dividend reinvestment.

Dividend reinvestment plans usually have no commission fees, no minimum investment requirement, and also provide the ability to provide purchase  fractional  shares. Another good aspect of this type of investment is that it allows you to dollar cost average your stock purchases overtime.  Many experts believe that it is a mathematical certainty that through dollar cost averaging you will eventually end up with a better than average cost per share.  Of course the best aspect of having dividend reinvestment done at your book which is that it will become an automatic investment but you don't have to worry about handling yourself. This makes it great for people who are  retirees.

Dividend reinvestment has many benefits but you should be aware of some of the negative aspects that come with this type of investing.  when you decide to give authority for reinvestment over to your brokerage you relinquish control over your purchase price.  This means that you don't get too set limit order azure choose which stop you by because it's automatically re-invested into the stuff that the dividend came from.  It is also good to remember that your dividends still must be considered for tax purposes.  Reinvested dividends are considered as qualified dividends which means a text at a lower rate than ordinary income,  but it's always good to  mention dividends too your tax preparer or financial advisor.

If you are in your twenties but I'll forward minded and have retirement plans then you should be sure to add dividend reinvestment to that  plan. Thanks to the compounding effect of dollar cost averaging as well as the natural compounding of dividends you can see dramatic gains as time moves forward.  By the time you reach 30 or 40 years of investing your decision to reinvest could literally add up to millions of  returns depending on how you manage it.  The best way to capitalise on  this type of opportunity is to enroll all your dividends in a reinvestment plan.

<img src="https://cdn.discordapp.com/attachments/416857204990410756/445152487305904128/2_copy.png" alt="" /><br/><br /><center><hr/><em>Posted from my blog with <a href='https://wordpress.org/plugins/steempress/'>SteemPress</a> : https://habarinetwork.com/2018/07/13/be-ready-for-retirement-with-dividend-reinvestment/</em><hr/></center>