DRIP - reinvest dividends or deposit as cash?

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Topic Author
runnergirl
Posts: 131
Joined: Thu Nov 04, 2010 1:15 pm

DRIP - reinvest dividends or deposit as cash?

Post by runnergirl »

For restricted stock awards, do you recommend having dividends reinvested in the company stock or taking the cash?
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SSSS
Posts: 1893
Joined: Fri Jun 18, 2010 11:50 am

Re: DRIP - reinvest dividends or deposit as cash?

Post by SSSS »

Investing in your own company's stock only makes sense if you get a nice discount, and you should generally sell it as soon as you're allowed to do so. Reinvesting dividends (presumably) doesn't get you a nice discount, so why would you do it? Also, dividend reinvestment in a taxable account can create many small tax lots, which can make your life more complicated later.
Topic Author
runnergirl
Posts: 131
Joined: Thu Nov 04, 2010 1:15 pm

Re: DRIP - reinvest dividends or deposit as cash?

Post by runnergirl »

The dividends are for unvested stock so I did not pay for them. I typically sell as soon as they are vested.
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