Gyroscopic Investing

I have my 25% stock allocation set up with Fidelity's S&P 500 Fund (Spartan Deluxe Supreme, or something like that). These funds always reinvest dividends, correct? Or do some folks set them up within the PP so that the dividends just get thrown out as cash? Any plus or minus to having the dividends reinvested? Sorry to bother you with such a basic question. Will try to challenge you on my next post. Thanks.

I don't know if the NEI abbreviation is currently in use in cyber-communications or not but it should be. If TMI is too-much-information, NEI, is not-enough-information.

Are you talking about taxable or non-taxable accounts?

If taxable you generally avoid dividends if you can unless you like the idea of forking over some of your profits to the government as your civic duty.  If non-taxable I don't see where it matters.

(P.S. - with Fidelity you can click on year-to-date tax information in your taxable accounts and see if you are accumulating any taxable income).

The usual advice is to dedicate any dividends to the cash portion of the portfolio. This is primarily to minimize the frequency of rebalancing which is usually a taxable event. Off the top of my head I don't know what the Spartan funds do. If you are uncertain what is going on with your fund/portfolio just contact your broker.

Thanks ns3 and Ad Orientem. NEI. Sorry about that. The stocks and LTTs in my PP are all in either tax-deferred (mostly) or tax-free accounts. Appreciate your help.

barrett wrote: I have my 25% stock allocation set up with Fidelity's S&P 500 Fund (Spartan Deluxe Supreme, or something like that).

Sounds like a mighty tasty pizza... 

I think I read in one of HB's books that he advocated non-reinvesting dividends because it's a forced reallocation to stocks, which may not be what you want to do.

Sam Brazil wrote: I think I read in one of HB's books that he advocated non-reinvesting dividends because it's a forced reallocation to stocks, which may not be what you want to do.

Reinvesting dividends also makes for a messy tax return due to all the tiny lots.