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Reinvesting dividends - what's the best way to do it?

I expect to receive around €3,000 in dividends this year, i.e. an average of €250 per month. 🎉

And my goal is clear: don't leave it lying around, reinvest it straight away.

But now I'm asking myself: what's the best strategy here?

How do you do it with your dividends?

Options I am considering:

A fixed ETF just for reinvesting, e.g. a dividend ETF or world ETF - and put everything in there every month, e.g $VWRL (-0,4%) or $VWCE (-0,29%)
Adjust flexibly every month and invest in a dividend stock (king or aristocrat) in which I see the best opportunity at the moment, this month it was the $ALV (-1,14%)
Collect and invest 1x/year (e.g. at the end of the year / on a dip)

I've started doing it this way now:

👉 Every month check what's coming in in dividends and then set up a savings plan for the middle of the month.

I've started with Allianz as a test - but I'm not sure whether that makes sense or whether I'd be better off putting it consistently into a dividend ETF, such as $TDIV (-0,1%)

I'm also considering starting a separate ETF for this so that I can track it closely:

What have my reinvested dividends really brought me? (I find this quite motivating from a purely psychological point of view 😄) but I would actually rather reduce my positions than build up more.

How do you do that?

Do you have a "reinvest ETF"?
Do you invest on a monthly basis or rather bundle them?
Do you prefer dividend ETFs, shares, world ETFs or simply buying into the strongest positions?

Looking forward to your tips & experiences! 🙏

42 Commenti

If I were you, I would first clean up the portfolio and then see where the dividends are best stored.

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Ayecaramba@Ayecaramba256

@Pezi just because it doesn't correspond to your strategy, he doesn't HAVE to do anything

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Julian@MoneyISnotREAL

@Ayecaramba256 The contributor has asked for opinions/procedures of other users and @Pezi has described how he would do it if it were his depot.

And if I quote you: "But one question: why so many different ETFs? It doesn't make sense to me". You are agreeing with the statement from @Pezi. Clean up and then see where you reinvest the dividends (according to your statement via a savings plan).

And I agree with @Pezi, clean up first. The portfolio is a mess. Confusing, all the overlaps and correlation...
I would invest the dividends in an ETF via a savings plan (averaged over the annual dividend).

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Walter S.@Roots

@Pezi Honestly - with 250k you can definitely have a few more positions in your portfolio...
The composition doesn't look random either...
Maybe it's just a different strategy than your own...

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Hansetrader@Hansetradee

And on top of that, there are 2 portfolios - from my husband and myself, which I now manage on my own out of interest. However, I have already mentioned in my article that I need to sort things out

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Pezi@Pezi

@Ayecaramba256 Where did I write anything about must and how do you know my strategy?

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Pezi@Pezi

@Roots With a portfolio of this size, investing 20 euros in Tesla and a few other mini positions doesn't really make sense.

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Walter S.@Roots

@Pezi You're right.
I just don't see the need to "muck out" in general.
Even the overlap of etfs and their simultaneous existence can have reasons...

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Hansetrader@Hansetradee

@Pezi Yes, it was a gift of shares, my husband and I have merged our portfolios and somehow I'm having trouble selling anything. But I've already thought about 10 positions that I want to get rid of

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Hansetrader@Hansetradee

@Roots You're actually right. I already had something in mind. But I'll soon have a look at what I can get out of smaller individual share positions. I just always find it difficult here that it's considered the ultimate goal to have a nice clean portfolio. If you have more than 20 positions you are immediately chaotic and with 3 positions "oh how great, what a clean portfolio"

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Walter S.@Roots

@Hansetradee yes, it's always a fine line...
Except for the mini positions, I think your portfolio is 👍...
And you also have to bear in mind that it's 250k... I wouldn't be comfortable with 10 positions at 25k, for example...

But it's all a matter of taste...

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Visualizza tutti 4 ulteriori risposte

Chris@1Chrischi1

far too many stocks. what do you want to achieve with the small positions?
I would first reduce to a maximum of 50 stocks or less and reallocate.

my recommendation: throw out everything under €1000

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Royal_TS@Royal_TS

Class Depot🚀 I reinvest in the $TDIV and in the $JEGP

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Hansetrader@Hansetradee

@Royal_TS thank you! :) I actually have both of those too

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DocTrader@value_crafter_1628

Great, cash flow! 💸 I reinvest dividends in dividend shares. I have divided my portfolio, which is similar in size overall, into a dividend block, value block and risk/growth block. Other asset classes such as Bitcoin, gold and silver are kept separate for the sake of clarity. Best wishes and good luck.

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Hansetrader@Hansetradee

@value_crafter_1628 Do you also have several dividend ETFs? And which ones exactly?

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DocTrader@value_crafter_1628

@Hansetradee No, the dividends there are too low for me. I have put together a bundle of shares that are broadly diversified geographically and by sector. Together with the other dividends from the value block, they yield ~5000 euros in dividends per year. Around 76k is currently invested in the dividend block.

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ThomasHH@ThomasHH

There are too many stocks for the portfolio volume. I would either increase or sell everything under 1000 euros.
For 3000 dividends, for example, you get 7 shares of $ALV - that's an additional 125 euros in dividends per year and more shares and dividends the following year.
In 10-15 years, your personal dividend yield will be 10%
This is how you build wealth.

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Ayecaramba@Ayecaramba256

@ThomasHH are not

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Hansetrader@Hansetradee

@ThomasHH So would you only go into one single stock, for example? For example, Allianz this year and see next year? I don't want/need to reach 10% 3-5% would be great. Right now I'm not even at 1%.

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ThomasHH@ThomasHH

@Hansetradee The longer you hold a stock, the higher your personal dividend yield will be. I have held 600 shares in $ALV for years and have a dividend yield of 9%. I have also held other dividend stocks such as $MO $KO $FNTN $TTE $O and others for years with steadily increasing dividends.
You don't need 10%? Why are you invested in the stock market? Then overnight money is enough for you.

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Hansetrader@Hansetradee

@ThomasHH as I still have 30 years ahead of me and want to see the money grow rather than pay out directly :) of course both would be great, but dividend stocks are not usually the fastest growing stocks now. Or do you have an all-weather solution? ;)

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Olli@Olli68

Although 69 is my favorite number, I also think there are too many positions. Especially all the world ETFs. I would sell all the world ETFs and only keep or significantly increase $VWRL and $TDIV. That's where most of my dividends would go over the next few years.

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Demas@Demas

@Olli68 😂favorite number

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Hansetrader@Hansetradee

@Olli68 😀🫰 Yes, that makes sense!

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Ayecaramba@Ayecaramba256

I start each new savings plan with the amounts that I expect to receive as dividends in the new year. For that long, it's 2%

But one question: why so many different ETFs? It doesn't make sense to me

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Hansetrader@Hansetradee

@Ayecaramba256 so at the end of the year you adjust your savings plans to your expected dividend for the year? This is partly due to my husband and I combining our portfolios and my reluctance to sell shares ;) I am working on myself

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Walter S.@Roots

Great portfolio!
I have currently created my "own dividend ETF" at trading212 and the dividends are automatically reinvested every month...

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Hansetrader@Hansetradee

@Roots that works automatically there? But your normal portfolio is not with Trading212?

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Walter S.@Roots

@Hansetradee Automated- yes...
There are shares and etfs... you put together a "pie" and off you go...
Bonds are not available there...

Custody accounts: I have several

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ehrlichergauner@ehrlichergauner

I automatically reinvest the dividends from my ETFs - thanks to the free option offered by Flatex. The dividends of any individual shares flow into the VWRL as soon as a certain amount has been accumulated, so that a change to the savings plan pays off.

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Hansetrader@Hansetradee

@ehrlichergauner sounds good! And it's less work.

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Musikerie@Musikerie

My securities account is still oldschool and reinvests incoming dividends automatically

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Daffy@Daffy

I would eliminate at least 40 positions and focus on a comprehensible and, above all, sustainable strategy.

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Chris_legt_an@Chris_legt_an

There are always a lot of dividends in May because I have a lot of German stocks in my portfolio, so I think about where to reinvest them. What comes in over the year is topped up from time to time.
However, I've also thought about increasing the proportion of my World ETF, whether I should look at which month tends to have the fewest dividends (currently around €350 net) and set up a savings plan that invests €350 per month. But at the moment I'm finding too many exciting individual stocks where there's also a bit of gambling😁

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Michi@MagM94

I put all my dividends into a Bitcoin savings plan. I can then see how the "value" of the dividends I receive changes over the years.

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Mikipe@Mikipe

Just in my mind
50% of dividends for rebalance the portfolio
50% split between taxes (depends) and increase my income if taxes are included so 75-25

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Harald@Madhatter5566

Dividends are a de-investment tool. So either it's what I want to take out, then it's not reinvested... Or use them for diversification or balancing.

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