Generally speaking, there are two dividend ways for our investment funds, namely cash dividend and dividend reinvestment. So which of these two ways is better? This mainly depends on the type of fund, so let's look at the situation in Bian Xiao. Which is better, fund cash dividend or dividend reinvestment? The so-called cash dividend refers to a way to distribute investment dividends in cash, and dividend reinvestment is to invest after converting the current income into fund shares. It can be understood that cash dividend is simple interest, and dividend reinvestment is compound interest. Many times compound interest is better than single interest, because compound interest can generate more interest, but it is not always the case in fund investment. If it is a low-risk fund, using dividend reinvestment can naturally create more interest, but for high-risk funds, using dividend reinvestment is likely to increase risks. For example, if the price of the fund I hold today is 10000 yuan, and it goes up by 10% the next day, then the value of the fund will go up by 1 1000 yuan. The increase and decrease are the same, but in fact, the value of the fund has indeed decreased. In short, the advantages and disadvantages of the two dividend methods can not be generalized, but should be combined with the risk of the fund. If it is a low-risk fund, the dividend reinvestment method is better. If it is a high-risk fund, the way of dividend reinvestment will increase the risk of investors.