Automatic Reinvestment Plan
Definition of 'Automatic Reinvestment Plan'An investment program in which capital gains or other income received from investments are automatically used for reinvestment purposes. In the case of a mutual fund, for example, capital gains produced by the fund would be used to automatically purchase more shares, instead of being distributed to the investor as cash. |
|
Investopedia explains 'Automatic Reinvestment Plan'By using an automatic reinvestment plan, an investor is able to easily make use of his or her investment gains to produce further gains, taking advantage of compounding. Over a period of years, the added value produced by automatic reinvestment can turn out to be worth a substantial sum. |
Related Definitions
Articles Of Interest
-
How Much To Save To Become A Millionaire
With a little discipline and the help of some powerful savings vehicles, anyone can hit this mark. -
The Perks Of Dividend Reinvestment Plans
These plans offer shareholders a way to directly invest in some of the top companies without the commissions. -
Investing 101: A Tutorial For Beginner Investors
Do want to invest, but don't know how to begin? We'll show you the building blocks you need to get started. -
Women: Invest In Your Financial Literacy
Learning about money may seem intimidating, but it's not as hard as it looks. -
4 Behavioral Biases And How To Avoid Them
Here are four common common behavioral biases for traders and how to minimize their effects on your portoflio. -
Mutual Fund Ratings: Crucial or Insignificant?
Mutual fund ratings can help investors, but they have their drawbacks as well. -
Multi-Asset Funds Or Your Own Mix?
The underlying concept of mixed funds is very appealing. Discover if you're better off with professional management or creating a mixed fund of your own. -
5 ETFs Flaws You Shouldn't Overlook
Despite their popularity, exchange traded funds have some drawbacks that investors should know about. -
Which Mutual Fund Market Cap Suits You?
Different funds invest in companies with different market caps. Find out which is right for you. -
12b-1: Understanding Mutual Fund Fees
Many mutual funds charge investors a 12b-1 fee to pay for marketing and promotion expenses.