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Re: dividend with recursive routine

by dHarry (Abbot)
on Aug 24, 2010 at 09:33 UTC ( [id://856888]=note: print w/replies, xml ) Need Help??


in reply to dividend with recursive routine

Some general points about investing & the reinvestment of dividends with respect to the model you use (nothing to do with Perl).

  • stock prices are not constant, it might be $100 right now but how about 3 years from now?
  • dividend is not constant, typically you would like to see dividend go up over time:)
  • reinvestment of dividend... "cash is king!" Personally I don't reinvest dividends (in the same stock) unless I get something extra out of it, like a DRIP but only when it offers me some additional advantage. I would like to decide for myself at what price I buy a stock!
  • CountZero raises an interesting point, some brokers allow you to buy fractions of shares, not just mutual funds but of specific stocks as well.
  • So I suggest to complicate things:)

  • Model the volatility of the stock and the (slight) increase of dividends over time.
  • Maybe factor in the buying of fractions of stocks?
  • A bare number some years from now doesn't mean anything, if you want a more meaningful number you will have to take into account costs (your broker), taxes (sigh) and inflation.
  • Cheers,

    Harry

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