: Meaning of reinvestment Is it correct that stocks and mutual funds can distribute dividends and capital gains automatically without account holders' intervention, and then reinvest the distributed to buy new shares? From

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1) When it says "an investment or mutual fund", is a mutual fund not
an investment? If no, what is the definition of an investment?

A mutual fund is indeed an investment. The article probably mentions mutual funds separately from other investments because it is not uncommon for mutual funds to give you the option to automatically reinvest dividends and capital gains.

2) When it says "In terms of stocks", why does it only mention
distribution of dividends but not distribution of capital gains?

Since distributions are received as cash deposits they can be used to buy more of the stock. Capital gains, on the other hand, occur when an asset increases in value. These gains are realized when the asset is sold. In the case of stocks, reinvestment of capital gains doesn't make much sense since buying more stock after selling it to realize capital gains results in you owning as much stock as you had before you realized the gains.

3) When it says "In terms of mutual funds", it says about "the
reinvestment of distributions and dividends". Does "distributions" not
include distributions of "dividends"? why does it mention
"distributions" parallel to "dividends"?

Used in this setting, dividend and distribution are synonymous, which is highlighted by the way they are used in parallel.

4) Does reinvestment only apply to interest or dividends, but not to
capital gain?

Reinvestment only applies to dividends in the case of stocks. Mutual funds must distribute capital gains to shareholders, making these distributions essentially cash dividends, usually as a special end of year distribution. If you've requested automatic reinvestment, the fund will buy more shares with these capital gain distributions as well.