Which method is the best for fund dividends?
(1) market outlook
If you are optimistic about the market outlook, you can choose to reinvest in dividends, because cash dividends will make some funds miss out on value-added opportunities. In addition, dividend reinvestment can save a subscription fee compared with taking out cash to buy the fund again.
On the other hand, if you judge that the market outlook is not good, you can choose the way of cash dividend to let some funds avoid the downside risk.
(2) Fund type
For some closed-end funds, according to the fund contract, there will be 1 to 3 years to be redeemed. At this time, you can choose to cash in part of the proceeds through cash dividends.
(3) Fund investment mode
If you choose an investment fund, dividend reinvestment may be more appropriate. Because the fixed investment of the fund requires regular investment, and the long-term holding cost is high, if you choose cash dividends at the same time of fixed investment, it is equivalent to taking out funds with one hand and adding them with the other, which is not only contradictory, but also requires additional subscription fees.
(4) Personal risk preference
For conservative investors, cash dividends can make the visible gains fall into the bag as soon as possible; For enterprising investors, if they pursue higher yield, they can consider dividend reinvestment.
It is worth noting that under normal circumstances, except for monetary funds, general open-end funds default to cash dividends. If investors want to reinvest in dividends, remember to make amendments before the equity registration date of fund dividends.