AutoInvest gains - Pies

Will Trading 212 eventually AutoInvest the gains I make in my pies such that their value begins to compound? Or do we need to sell the stock to take the gains and then reinvest?

I think the best advice here is to do some homework around the topic of investing before you go any further.

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Are the gains you’re referring to dividends? Stock gains are built into the price. Hence why it’s call share/value appreciation. Dividends are paid as cash, and are either set to automatically reinvest or not reinvest depending on your settings.

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Please elaborate - what about that post suggest a lack of understanding?

Thanks for the response. I had already changed the settings to autoinvest dividends. Just keen to understand how the gains would compound over time if not automatically/manually reinvested. It appears that this might be a totally stupid question… :sweat_smile:

When the house that you paid 300.000, now has a value appreciation and it’s quoted for 400.000, what happens?

Nothing!

Few months further and it’s now valuated at 350.000, again nothing changes if you are no planning to sell the house or buy another one identical.

It’s all “virtual gains”, there is no real money on your account before you sell it, and if you do, you have to pay taxes on the gains.

Forget any magical theory about selling/rebuying, focus on choosing good companies and do your recurrent investments.

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Yes, understood. But I’m saying that a mechanism that automatically sells stock gains (and reinvest them) on a pre-chosen timeframe would be a useful way to automate the pie.

Ok, stock X is worth $100.

In say a year, it is now worth $150. A whopping 50% gain, you need to invest in TSLA to beat that… anyway…

You now sell your 1 share of stock X to realise your gains. Now you say you want to compound by rebuying. Well, how much is 1 stock of X worth? Probably slightly more or less than what you just sold it for. So what exactly do you think is achieved by doing this other than incurring transaction penalties.

A 50% growth on $150 is $225. There is your compounding.

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Are you maybe talking about rebalancing? The stocks that have made big gains get trimmed down, and this money buys the stocks that have underperformed?

You have two stocks in a Pie:
Stonk A 50%
Stonk B 50%

after a month you have the following scenario:
Stonk A 55%
Stonk B 45%

If what you want is to sell 5% of Stonk A to rebalance Stonk B… guess what?
It’s exactly what the Rebalance feature does.

A great way to sell good stocks and move the money to the bad ones :joy: