Under the premise of no selling demand, dividend reinvestment can help users reduce some investment costs and improve investment efficiency. If you want to redeem the fund, cash dividend is a good way to quit, and you can avoid the redemption fee.

The fund does not involve enterprise operation, so it will not generate operating profit. Whether to pay dividends depends on the income generated by the fund in the investment process. The higher the income, the more dividends. Stock dividend depends on the business performance of the enterprise, and the dividend amount also comes from the profit of the enterprise.

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Precautions for reinvesting fund dividends:

Although dividend reinvestment is good, it is not suitable for everyone at any time. If the previous dividend reinvestment is not redeemed under the condition of large market fluctuation, then the probability of loss will also increase at this time. When the market is bad, you can choose cash dividends to reduce losses.

Investors with relatively large cash flow on weekdays can also choose cash dividends to obtain cash distribution. Generally speaking; If it is a long-term investment, dividend reinvestment is a good choice. However, when choosing funds, try to choose some funds with better future growth space, such as index funds. According to the performance ranking of funds, you can choose funds with high performance and relatively stable performance in the past two or three years.

Baidu encyclopedia-fund share

Baidu encyclopedia-fund dividend reinvestment