Is there a way to show dividend reinvestment as an income? At the moment, I am adding them as “Buy” because technically I am buying new securities. But it would be good to show them as an income. Wondering if that’s possible. Thanks.
I do not quite get your point. If a security pays dividends they are liquidized into your PP cash account. From that you buy new securities, so the dividens appear as “income” in your cash account.
Thanks. The dividend is not coming to my cash account as I chose to reinvest dividend (DRIP).
What is the proper way to record automatic dividend reinvestment? Do I add the dividend in the “cash account” and then buy?
there are different philosophies here in the forum how dividends are managed.
I personally actually do receive dividends and PP puts them into the corresponding cash account. If I decide to reinvest them (for whatever security) I book a BUY so that PP takes the money for that purchase from the cash accout.
Important to note as this sometimes comes up here in the forum as well, the above is true only if you physically receive the dividends. It it not true if your fund is an accumulating fund.
Does this make sense?
Thanks. I don’t get dividend paid out in my bank account. They are automatically reinvested for me via the dividend reinvestment plan. In this case, is it best to choose dividend as being paid-out in the cash account and then buy stocks for that amount? One minor issue with this strategy is that, sometimes there are funds carried-over in the future. For example, $2 may be carried-over as $2 may not be enough to buy 1 stock as each stock costs $3.
Yes, because that is what also happens in reality. You just don’t see it, because it is an automatic process of your broker.
Are they really then waiting until they can buy a full new stock? I would assume that they will buy parts of a stock then. But nevertheless the dividend was payed at the first point of time and if it is really the case that they wait and don’t invest it until you have the amount for a full new piece, then you lost a little bit of performance in this time, because money is not fully invested.