Accumulation

Accumulation: "Accumulation

	1) In the context of individual investing, it is the process of contributing cash to invest in securities over a period of time in order to build a portfolio of desired value. Dividends and capital gains are also reinvested during this process. 2) In institutional investing, it is the action of a large investor buying up many shares of a public company over an extended period of time. 3) In corporate finance, the retention of company profits for reinvestment in business operations, as opposed to the payout of earnings as dividends to shareholders.
	1) When an individual investor is attempting to build up the value of their portfolio, they are said to be accumulating wealth. The reinvestment of profits over the course of the investment time horizon can greatly boost the pace of accumulation through the benefits of compounding. 2) Large investors and financial institutions are limited in their ability to move in and out of securities, since they deal with large numbers of shares which would drive the price of a security up if ordered all at once. In order to completely buy their intended number of shares, institutional investors spread their accumulation of shares over a period of time. 3) Rather than pay dividends out to investors, accumulation of earnings within the corporation boosts the ability for business expansion and growth, hopefully producing extra value for shareholders in the long run.

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