When holding stocks and bonds you are entitled to receive a compensation called dividend (or coupon) paid out normally every month or quarter.
We make sure to always re-invest your dividends to maximise the benefit of compounding interest.

Below we will make a small example for a portfolio of EUR100,000 with 5% yearly dividends and will show the returns after 20 years for an investor spending the dividends and another investor re-investing them:

1. Taking the dividends out every year: In this case the investor will make EUR5,000 per year or EUR100,000 after 20 years.

2. Re-investing the dividends: In the case of reinvesting the dividends the investor will make 171,264EUR after 20 years. This is 71% extra from the investor who takes the money out and is simply explained because you put your earned dividends back to work for you.

This is why it is important to re-invest all your dividends if you want to maximise the long term returns.

This document does not constitute and shall not be construed as a prospectus, advertisement, public offering, or placement of, nor a recommendation to buy, sell, hold or solicit, any investment, security, other financial instrument or other product or service. This document is for general information only and is not intended as investment advice or any other specific recommendation as to any particular course of action or inaction.