Amy Arnott, portfolio strategist for Morningstar Inc., discusses how a popular dividend investing strategy works, and who would or wouldn’t benefit from it.

On this episode:

Let’s focus on when dividend reinvesting works as a strategy and when it does not. Who should consider reinvesting dividends?
When shouldn’t an investor reinvest their dividends?
Are there any differences between reinvesting dividends in a taxable vs a tax-deferred account?
What types of dividends are taxable and non-taxable?
How long you’ve owned a dividend-paying stock matters when it comes to taxes. Can you explain the differences between qualified and non-qualified dividends?
What kind of record-keeping does reinvesting dividends require, and how does reinvestment affect the cost-basis?
How are considerations different for stock dividends vs fund dividends?
What’s the final takeaway for the audience about dividend reinvestment?