The Benefit of Reinvesting Your Dividends
What a difference a dividend makes.
Often, when we talk about how the market or even a single stock is performing, we point to the change in price—but calculating returns isn’t always so simple. When a company pays a dividend, you should factor that in, too. For a fund or index made up of hundreds of different stocks, you should include dividends from all the companies that pay them. That can dramatically alter returns.
