Re investing stock/bond gain/loss

[Rianne]

I reach out to the financial wizards on this forum.

Recently, DH/me struggling with bond funds vs CD FDIC insured (simple interest). Currently all our gains in bond funds are re invested and have been for 20 yrs or more.

This brought to mind reinvesting stock dividends and gains rather than taking gains in index funds.

How in the heck does that work? I get gains and losses, paying taxes on gains from buy price to sell price. I'm fuzzy re investing gains and losses within the same funds AND the risk portion of having FDIC insured CDs vs bond funds.
I am obviously confused and had not considered re investing as opposed selling. Our strategy is to leave VG investments alone for 5 more years at 50/40/10.

I asked our VG advisor about 2008 - 2012 or so. What if banks fail, we are guaranteed FDIC CD's but could collapse in bond area?

One more, if we are re investing at higher prices and market goes down, we still get gains from when we bought at market low, but only THOSE purchases at low prices get the gain. The re investments at higher prices lose. Ohh the complexities of investing!

[Rianne]

Forgive me, this was a mess of a post. We have an appt. with CPA and will figure this out.