Reinvest Apple dividends?

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Hpa123
Posts: 1
Joined: Mon Jan 13, 2020 1:54 pm

Reinvest Apple dividends?

Post by Hpa123 » Mon Jan 13, 2020 2:06 pm

Long time reader, first post.

Wife and I have a sizeable amount of our portfolio in Apple stock, mainly because a 5k investment on her part years and years ago has significantly grown in size, and we’ve just been reinvesting the dividends. It’s about 15% of our portfolio now. For added info we’re both in our mid 30s.

My question is now that the stock continues to hit all time highs, is it worth continuing to reinvest the dividends back into Apple, or would folks invest them elsewhere?

Thanks!

mortfree
Posts: 1960
Joined: Mon Sep 12, 2016 7:06 pm

Re: Reinvest Apple dividends?

Post by mortfree » Mon Jan 13, 2020 3:15 pm

Is this a taxable account?

I have Apple in taxable and Roth.

I take the dividends in the taxable account as cash and reinvest the dividends in the Roth account for fractional shares.

Apple has been hitting highs for quite a few years now.

Most Bogleheads will not agree with holding this stock.
Last edited by mortfree on Mon Jan 13, 2020 3:17 pm, edited 1 time in total.

ohai
Posts: 1296
Joined: Wed Dec 27, 2017 2:10 pm

Re: Reinvest Apple dividends?

Post by ohai » Mon Jan 13, 2020 3:16 pm

You have more than 15% in AAPL if you own the broad market. 3%-5% of your index stocks could be AAPL.

retired@50
Posts: 992
Joined: Tue Oct 01, 2019 2:36 pm

Re: Reinvest Apple dividends?

Post by retired@50 » Mon Jan 13, 2020 3:18 pm

Hpa123 wrote:
Mon Jan 13, 2020 2:06 pm
Long time reader, first post.

Wife and I have a sizeable amount of our portfolio in Apple stock, mainly because a 5k investment on her part years and years ago has significantly grown in size, and we’ve just been reinvesting the dividends. It’s about 15% of our portfolio now. For added info we’re both in our mid 30s.

My question is now that the stock continues to hit all time highs, is it worth continuing to reinvest the dividends back into Apple, or would folks invest them elsewhere?

Thanks!
Given that it's grown to 15% of your portfolio, I'd think you'd want to take the dividends as cash, and re-invest them in something more diversified like a total stock market fund, or a total bond market fund. Holding a big chunk of your portfolio in a single company is riskier than holding the "market portfolio".

Regards,
Boggle - a game from Parker Brothers. Bogle - investor, founder of Vanguard.

bloom2708
Posts: 7082
Joined: Wed Apr 02, 2014 2:08 pm
Location: Fargo, ND

Re: Reinvest Apple dividends?

Post by bloom2708 » Mon Jan 13, 2020 3:18 pm

If you have other total market funds, you likely have ~20% or more in Apple.

Apple is one of the largest components of many of the US stock funds.

If saving more in your 401ks, Roth IRAs and taxable doesn't bring your Apple percentage down, I would consider selling some.

For sure, turn off the dividend re-investment if in taxable.
"People want confirmation, not advice" Unknown | "We are here to provoke thoughtfulness, not agree with you" Unknown | Four words: Whole food, plant based

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