TLT Interest Payments

Discussion of the Bond portion of the Permanent Portfolio

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craigr
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Re: TLT Interest Payments

Post by craigr » Sat May 15, 2010 6:27 pm

foglifter wrote:
craigr wrote: With funds or ETFs you normally can do dividend re-investment or not. It's often an option you can select (a brokerage may call it DRIP - Dividend Reinvestment Program). The benefit of enrolling in the DRIP at a brokerage/mutual fund company is you can have the shares bought automatically with no commissions when the dividends are paid.

However, what I recommend is to NOT reinvest the dividends/interest. Have them all swept into your cash account. As the money accrues through the year you can use the proceeds to buy into the lagging assets at certain times. This makes bookkeeping a lot easier because you do not have a bunch of tiny share lot purchases going on and makes rebalancing more efficient (especially for taxable accounts).  
craigr, do you think this also makes sense for IRAs?
Possibly yes if you have multiple assets in your IRA. It may make sense to dump the payments into cash in the IRA and then redistribute it to the laggards manually.
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