Expert: Paul Henneman - 3/21/2011

Question
Hello:

I am thinking about opening an online brokerage account. One of the questions on the application asks whether or not I want to reinvest dividends. I do for mutual funds, but should I for stocks?

Would it be better to place any dividends into the money market account that is available with the account?

I thank you for your reply.

Answer
Kenneth,
  Thank you for your question!
This is completely up to you, there is no right answer regarding if you want to re-invest your divdends.  If you reinvest, your investments will grow more quickly. If you are retired, or want a flow of cash coming from your investments, then you could have those dividend payments deposited into your other account.

I hope this helps, please do not hesitate to follow up with me if I can offer anything more specific,

Sincerely,
Paul Henneman
President
ValuEngine Inc
www.ValuEngine.com