I'm with Smith Barney and also received the reinvestment at $14.355. I have asked my broker to do the research and find out how I received this ridiculous pricing (way out of range on either 12/31 or 1/22) and, why I didn't receive the 1/18 dividend to boot. The shares showed up in my account on 1/22. As soon as I received a satisfactory answer I'll post again.
I was a little amazed at the rather wide variation of the reinvestment share prices everyone was mentioning on the board ... so I checked into it ...
I hold IGR both in my own individual retail Vanguard brokerage account, and in my 401K brokerage account (Ameriprise) .. Ameriprise showed trade date of reinvestment as 12/31, with reinvestment share price of $13.66 ...
Vanguard, on the other hand, showed same trade and settlement date of reinvestment as being on 12/31, but with price of $14.51 ... I checked price range of IGR on 12/31, and lo and behold, $14.51 was way outside the range, well above even the highest price for the day, and a pretty hefty 81 cents per share above the Ameriprise price - and this on a LOT of shares ..
So I called Vanguard ... seems their clearing agent (Pershing) has a policy of executing any dividend reinvestments as a market order at the open of that trading day which occurs three business days BEFORE the listed payable date, SO LONG AS there are at least four business days between the record date and the payable date .. this put the trade date on 12/26, and indeed, the ultimate reinvestment price of $14.51 was in the range for that date .. there are undoubtedly different policies for different brokerages and clearing agents, and thus the discrepancies are explained.
- C Steinbruegge, MD
When I spoke to Smith Barney, they told me if you read the Prospectus, it will explain how they go about handling the reinvestments. Don't know if they were giving me the old run around or not as I don't have the propectus and I probably woundn't understand it. Oh well!
I dont see why you would reinvest the dividend.This cef is essentially an income producing stock.It yields alot of cash if you reinvest the dividends you will have a hard time keeping track of your cost basis.I should have sold this when it went up to the mid 20s and taken the capital gain as it will take along time to recapture thet move but I stuck with it because of the income stream
I agree about selling in the 20 range. But now I am reinvesting so as to grow the monthly dividend and if it goes back to that range, maybe then sell. But I'll get paid to wait till then and I might add pretty well. My capital gain that I'm reinvesting amounts to about $3,000. Maybe I should have taken that, but in the future I think I will be ok with this. Thoughts?