Is it best to let dividends roll back over to purchase more holdings of the same fund ... or to take as cash for use in purchasing other stocks.

Terry Says:

Part of the overall “total return” of the stock market is dividends.  I always recommend reinvesting them.  This is easy to do if you use a mutual fund.  And your reinvested dividend will be automatically diversified into shares of the mutual fund, which holds multiple stocks.    If the money is inside a tax-sheltered account such as an IRA, there is no tax consideration to this process.  But if you are investing in an after-tax account, remember that you will pay taxes on the dividends — even if they are reinvested.