With some higher yield distribution/dividend investments available I am tinkering with the idea of keeping the cash distributions and stock value combined. This will also have the added benefit that when AIM calls for a sell I can just transfer some of the distribution over to the cash reserve side and avoid commissions. And when if calls for a buy then I than could deplete the distributions before touching the cash reserve.
I could also drip these accounts but then I don’t have control over the purchase price.
Example:
Stock “A” 1,000@$10=$10,000
Distribution=$1000
Cash reserve=$10000
The stock price goes to $12 so I would have $12,000 in stock, $1,000 in distributions, total $13,000.
So AIM now gives me a sell of $1,700. I then transfer the $1000 from distributions into the cash reserve and sell $700 worth of shares.
The main reason I am looking at doing this is due to the flatness of the trading range of many of the high yielding investments and I feel this will add some volatility.
Seeking opinions.
