Does the fund choose dividend reinvestment or cash dividend?
Cash dividends are suitable for people: cash dividends are suitable for friends who need to withdraw income from the fund regularly. For example, they may need to take out some funds from the fund income every year for fixed expenses such as rent and car loan. At this time, it is more reasonable to choose cash dividends. You don't have to redeem the funds you hold, and you can also save some handling fees.
Dividend reinvestment is suitable for people: Dividend reinvestment is generally suitable for friends who are optimistic about funds or the market intends to hold them for a long time. If you are optimistic about a fund and plan to invest for a long time, it is wiser to reinvest dividends than cash dividends. Because dividend reinvestment can make assets grow in the form of compound interest, while cash dividend can only achieve simple interest growth. Over time, the investment income of the two will be great, or even double.
Note: At present, the dividend method of domestic fund subscription is the default cash dividend. If you want to choose dividend reinvestment, please remember to change it yourself. In fact, there is often no standard answer to financial investment. Learn to plan according to your own demand for funds and choose the most suitable way flexibly and reasonably.
Dividends are an expression of fund managers' attitude towards the market, at least indicating that there is no possibility of a sharp rise in the short term. If you are a short-term investor, it is more appropriate to choose cash or even lighten your position. If you are a long-term investor and have confidence in the market outlook, it is more appropriate to choose dividend reinvestment. If you have no attitude and don't know what to do, then redeem the principal, because in the long run, people's wealth and their cognition are matched.