Dividend Stocks Questions

Great responses...I guess my main question is: (Assuming we're talking about stable companies) Isn't it all a wash if you reinvest the dividends?

I had 50 shares @ $50; now I have 51 shares @$49 after a $1 dividend reinvestment. Same acct value. What am I gaining here? (other than a tax on imaginary income in a taxable acct)
 
LaxFan said:
Great responses...I guess my main question is: (Assuming we're talking about stable companies) Isn't it all a wash if you reinvest the dividends?

I had 50 shares @ $50; now I have 51 shares @$49 after a $1 dividend reinvestment. Same acct value. What am I gaining here? (other than a tax on imaginary income in a taxable acct)
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If you're a stodgy old investor, what you gain is peace of mind knowing your position is probably safe, so long as they keep paying appreciating dividends.
If you are a trader, you gain nothing, rather knowing you are being left behind by numerous better opportunities for quicker and better returns.
 
The dividend growth strategy is better than simply high dividends. GE had a high dividend once too, before management thought it was a better to ride around in Private Jets than actually manage the company. INTC has a great dividend and a flailing business.

AT&T had a high dividend but their management is a POS. Verizon is doomed as well no matter how high their dividend is. T-Mobile is the real leader in telecom with no dividend.
 
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