One often overlooked strategy in stock investing is dividend reinvestment. When a company pays out dividends to its shareholders, instead of taking that cash, investors can reinvest the dividends to purchase more shares of the company's stock. Over time, this can greatly increase the overall return on investment. By reinvesting dividends, investors are able to take advantage of compounding returns. This means that the dividends earned on the additional shares purchased through reinvestment can also generate dividends, creating a snowball effect of increasing returns. Furthermore, dividend reinvestment can help to dollar-cost average the purchase of shares. By buying more shares when prices are lower, and fewer shares when prices are higher, investors can potentially lower their average purchase price per share over time. In addition, reinvesting dividends can also lead to increased long-term wealth accumulation. Studies have shown that a significant portion of the total return from the stock market over the long term comes from the reinvestment of dividends. Overall, dividend reinvestment is a powerful tool for investors looking to maximize their returns and build wealth over the long term.