When you reinvestment dividends in a individual stock, what determines the price you pay on the day the money is invested ?
I’ve (dripped) stocks & funds @ fidelity for years, but never paid attention to the purchase price until yesterday. I have a stock that’s done awful over the past 14 months. Luckily for me, I quit (dripping) this one about 2 years ago. Since it’s @ multiyear lows, I thought I’d ‘outsmart the market’ by setting it back to (dripping) a couple weeks ago. Yesterday was the pay-out day & I was disappointed to find the shares were purchased very close to the day’s high & substantially higher than the closing price.
Obviously, I was wrong, but I assumed this was done the same way as the ‘employee stock purchase program’ I participated in through my employer. That is, the money was invested at the ‘closing price’ on the last trading day of the quarter.
Full Disclosure: It’s down another 5+% today. I guess that’s what I get for trying to time the market