The money earned by investors investing in index funds mainly comes from the difference in the net value of index funds and dividends. On-site index funds can only take cash dividends, off-site index funds can take cash dividends, and dividends can be reinvested.

Generally speaking, in the case of bad market conditions or declining funds, investors can choose cash dividends, so that investors can get some cash, reduce their own losses and save redemption fees; When the market is good, or the fund is in an upward trend, investors can choose to invest in dividends, which can increase the share held by investors, improve the income and produce the effect of compound interest. At the same time, choosing dividends and investment dividends can save fund subscription costs.