Keep your dividends working for you
Points to know
- Reinvesting dividends is another way to make investing automatic and add to your investment's growth.
- Take advantage of Vanguard's dividend reinvestment program, which has no fees or commissions.
- Understand the importance of the record date and ex-dividend date.
Choose to reinvest
Select Reinvest to buy additional shares. For long-term investors, reinvesting dividends has several benefits:
- You don't have to think about investing. It's automatic.
- You're buying at various prices, averaging out the price per share over the long term.
- You're compounding your investment's growth by continually adding more shares which, in turn, will generate dividends of their own.
The Vanguard Brokerage dividend reinvestment program
This no-fee, no-commission program allows you to reinvest dividend and capital gains distributions into additional shares of the investment that's making the distribution.
There are 2 dates to keep in mind if you're buying a security around the time a company announces it's paying a dividend:
- Record date: You must be a shareholder on the record date set by the company to receive a dividend.
- Ex-dividend date: In addition, you must complete your purchase before the ex-dividend date to receive a dividend.
Companies set these dates to make sure they pay dividends to investors who actually own shares of the company's stock.
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Vanguard's advice services are provided by Vanguard Advisers, Inc. ("VAI"), a registered investment advisor, or by Vanguard National Trust Company ("VNTC"), a federally chartered, limited-purpose trust company.
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VAI and VNTC are subsidiaries of The Vanguard Group, Inc., and affiliates of Vanguard Marketing Corporation. Neither VAI, VNTC, nor its affiliates guarantee profits or protection from losses.