My dividend paying stocks have been chugging along lately and I have been automatically reinvesting these dividends in more shares, My broker, CSA, takes care of this for me.
For the month of October and to-date in November, I have received the following dividends or payments and completed the subsequent reinvestments into more shares:
| Company | Dividends | Shares Reinvested |
| Coca-Cola Company | $10.61 | 0.2185 shares |
| General Electric | $10.09 | TBD |
| Wal-Mart Stores | $3.04 | 0.0559 shares |
| Bank of America | $9.77 | 0.1651 shares |
| IGM Financial | $42.82 | 0.9017 shares |
| IGM Financial | $42.82 | 0.9017 shares |
| S&P/TSX REIT Index | $21.02 | 1.3397 shares |
| EPCOR Power | $12.45 | 0.5061 shares |
| Procter & Gamble | $10.65 | TBD |
The thing I like the best about this is that it just happens. I do not need to do anything. All these companies, which I believe in for the long term, continue to throw off cash and I continue to buy more stock.
Does your strategy assume that the shares in the dividend-bearing stocks you invest in are always trading at fair value?
For example, if you thought Wal-Mart shares were undervalued while Coca-Cola shares were over-valued, wouldn’t it make sense to reinvest the KO dividends into WMT shares instead?
I think that’s one of the greatest feelings. When your shares increase every quarter.
Hi,
Do you hold separate accounts at CSA: 1 for Cdn. and 1 for US stocks?. I also hold an account there (CDN)but I haven’t purchased any US stocks yet. I wondering if there is much of a cost disadvantage of purchasing US securities via the CDN account.
I enjoy your most informative posts.
Thanks
James
Sacha:
The way my dividend accounts are set up is it automatically reinvests the dividends regardless of price. I understand where you are coming from – why not put the dividends in a “cheaper” priced stock. However, that would mean I would need to make a judgment call everytime I reinvest. I have found that the less thinking I do the better!! Seriously though, putting the account on auto-pilot like this has worked for me.
James:
The was the CSA is setup is I can hold both US and CDN stocks in the one account – for an RRSP at least. I do not hold any US stocks outside of an RRSP with them so I am not sure how that would look.
TDG
hi,
i want to invest small amounts & i thought your broker CSA would be the best…could even invest small amounts..but i read in a website
http://www.dividendgrowth.ca that these brokerages are risky & it’s better to stick to bank brokerages even if expensive..i know CSA is covered under CIPF..but is there any way i could lose money…like CSA doing something for which CIPF could wash their hands away..please your suggestions would be welcome..the thought of losing all the money because of broker is really scary….thanks in anticipation