As my readers know, I am a proponent of reinvesting my dividends to build wealth. I am trying to build an income stream for retirement. And if your portfolio yields 5%, then if you reinvest all your dividends every year, all else being equal you will grow your dividend income 5% every year. And with any luck (read dividend hikes) it will go up faster. I also like to reinvest dividends as it is a natural buffer against falling markets as you are getting more shares with the same dollars, which psychologically makes me feel better.
But if the markets are extended, or a particular security is extended, then reinvesting a dividend may not be the best idea. I am sure I am over thinking it and as I have mentioned here many times I am terrible at timing markets; but I have decided to not reinvest all my dividends for a while. It was weird, I looked at my Fidelity statement this morning and got the cash from BHK dividend... not shares. Actually not weird, but kind of cool. Felt like free money! The stocks I am still reinvesting in include AAPL, PRE, SAI, STO, AOD, ABR, CSQ, CSCO and INTC. Everything else is turned off.
GNW News
I have pounded the table more than once for GNW as I believe the sum of the parts is greater than the whole (by a lot). GNW is trying to monetize that by selling off some of it's ancillary businesses. This will allow them to focus, cut down on debt and perhaps eventually buy back stock (which would be huge). They announced yesterday they are selling Wealth division for $412m (Genworth to Sell Wealth Management Business for $412.5 Million). From what I have read, that is a fair price. I had seen in valued from $400m to $450m. The stock was up about 2% last night on the news. I do think it is positive and should be an additional catalyst to keep the company on trajectory towards book value.
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