10 Things Every Dividend Investor Should Know

In this article, we discuss 10 things every dividend investor should know. If you want to read more about dividend investing, go directly to have a look at 25 Things Every Dividend Investor Should Know. 

10. Dividend Reinvestment Plans (DRIPs):

Dividend reinvestment plans, or DRIPs, allow investors to automatically reinvest dividends into additional shares of the company’s stock. Through this strategy, investors are able to compound their investment over time without experiencing transaction costs. In addition to this, investors can gain long-term benefits from their dividend investments as dividends are automatically reinvested without any additional action from the investor.

A report by Wisdom Tree illustrated the remarkable power of compounding, where reinvesting dividends increased wealth accumulation over time, along with playing a significant role in the market’s overall returns. The report mentioned that dividends and reinvested dividends have accounted for 69% of the market’s returns since 1978. This means that if someone had made an investment of $10,000 in the stock market in 1978 and consistently reinvested their dividends, their investment would have grown to over $1.6 million in 2023.