For many people, dividends are their favorite part about investing in the stock market.
Essentially, this is when a company decides to share a portion of their profits with the shareholders.
There are lists out there of common stocks that pay out dividends, including the Dividend Aristocrats.
These are a select handful of companies that have been paying and growing dividends every single year for over 25 years.
When you invest with the Moomoo stock trading app, it is possible that you will invest in a stock or an ETF that pays out a dividend.
Dividends are usually paid out on a quarterly basis, however some companies opt for annual or monthly dividends instead.
Regardless, it is important for investors to understand what happens to these dividends and to have a plan for what to do with them.
Here's what happens when you earn dividends on the Moomoo trading app!
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When investors are paid out a dividend from one of their investments, they have primarily two options as far as what to do with it:
The first option is going to give you a small amount of cash on hand in most cases, unless you have a substantial dividend portfolio.
The second is going to allow you to earn compound interest, so it's probably a better option for most.
When you earn a dividend within your Moomoo brokerage account, that dividend will be automatically deposited into your cash balance held within your brokerage account.
At that point, you can decide whether or not you want to reinvest it or transfer the cash to your bank account.
If you do decide to reinvest that dividend, you could invest it back into the issuing stock/ETF (whatever paid out the dividend).
Or, if you wish, you can invest that money into something totally different on the Moomoo app.