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Our Best Forex Brokers article reveals the major play players in the trading industry.
However, which of them is the best broker for dividend investing?
This article answers your question and helps you make a wise choice.
Table of contents
Best Brokers for Dividend Investing in 2022
If you are thinking of investing in dividends in 2022 and beyond, here is a list of the best brokers to that meet industry standard that you can choose from:
What are Dividends?
Dividends are payments received on a per-share basis from a company in which you are a shareholder. These are generally paid on a set date for shareholders, people who hold at least a share in the company.
As a shareholder in a company, you can store your shares or reinvest it in the company to acquire more shares and gradually build your investment portfolio.
The Main Dividend Investing Strategies
When you reinvest your dividend, such reinvest dividends are generally commission-free. More so, if the broker allows it, you can buy fractional shares also.
There are different dividend investing strategies. The commonest ones are:
- Individual Stock Reinvestment: This strategy involves repeatedly investing in the same stock with the dividends money. Gradually, from a few shares, you can increase your shareholder’s value in the company.
- Pool and Deploy: This investment strategy involves reinvesting the dividends from your portfolio in undervalued or low-cost shares.
- Portfolio Reinvestment: This dividend investment strategy involves having a set of dividend-paying stocks with a certain allocation percentage that you periodically reinvest your dividends thus:
- Invest $1,000 on 5 shares with 20% allocation or $200 each;
- Over time, one of the stocks may perform better or worse than others. So, the allocation weight for each stock will change since the value of one share increases or decreases more than that of others;
- The goal is to invest more money in the badly-performing stocks to increase the allocation percentage compared to the other ones, and vice versa, by buying the poorly-performing stocks.
If you are contemplating dividend investing and have no clue about where to start, these are some renowned brokers for dividend investing you can check out. You may find one that meets your requirements and may be the perfect fit for your investment goals.
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