Investopedia

Continue to Site »

Reinvestment

Filed Under » ,
Dictionary Says

Definition of 'Reinvestment'

Using dividends, interest and capital gains earned in an investment or mutual fund to purchase additional shares or units, rather than receiving the distributions in cash.

1. In terms of stocks, it is the reinvestment of dividends to purchase additional shares.

2. In terms of mutual funds, it is the reinvestment of distributions and dividends to purchase additional units of that fund.

3. In terms of tax gain/loss harvesting, it is the realization of losses to offset a capital gains liability.
Investopedia Says

Investopedia explains 'Reinvestment'

This is definitely a great way to significantly increase the value of a stock or mutual fund. In the case of stocks, investors can use dividends to buy additional shares instead of receiving payments in cash.

Articles Of Interest

  1.

    The Perks Of Dividend Reinvestment Plans

    These plans offer shareholders a way to directly invest in some of the top companies without the commissions.

  2. Capital Gains Tax 101

    Find out how taxes are applied to your investment returns and how you can reduce your tax burden.

  3. How Dividends Work For Investors

    Find out how a company can put its profits directly into your hands.

  4. Women: Invest In Your Financial Literacy

    Learning about money may seem intimidating, but it's not as hard as it looks.

  5. 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.

  6. Mutual Fund Ratings: Crucial or Insignificant?

    Mutual fund ratings can help investors, but they have their drawbacks as well.

  7. 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.

  8. 5 ETFs Flaws You Shouldn't Overlook

    Despite their popularity, exchange traded funds have some drawbacks that investors should know about.

  9. Which Mutual Fund Market Cap Suits You?

    Different funds invest in companies with different market caps. Find out which is right for you.

  10. 12b-1: Understanding Mutual Fund Fees

    Many mutual funds charge investors a 12b-1 fee to pay for marketing and promotion expenses.
comments powered by Disqus
Marketplace
Hot Definitions

  1. Abatement Cost

    A cost borne by many businesses for the removal and/or reduction of an undesirable item that they have created.

  2. Validation Period

    The amount of time necessary for the premium on an insurance policy to cover the commissions, the cost of investigation, medical exams and other expenses associated with the issuance of the policy.

  3. Winner's Curse

    Because of incomplete information, emotions or any other number of factors regarding the item being auctioned, bidders can have a difficult time determining the item's intrinsic value. As a result, the largest overestimation of an item's value ends up winning the auction.

  4. Glocalization

    A combination of the words "globalization" and "localization" used to describe a product or service that is developed and distributed globally, but is also fashioned to accommodate the user or consumer in a local market.

  5. Disaster Loss

    A special type of tax-deductible loss, similar to a casualty loss, where a loss has been incurred by taxpayers who reside in an area that has been designated as a federal disaster area by the President.

  6. Fool In The Shower

    The notion that changes or policies designed to alter the course of the economy should be done slowly, rather than all at once.
Trading Center