I’m attempting to replicate a strategy where I bought 30 stocks on 5/20/2020 and made zero changes since. I would like to track the performance of that strategy through time, assuming dividends were reinvested and spin-offs either kept or sold (it doesn’t matter) as long as the cash balance doesn’t accumulate over time.
We can’t simulate the reinvestment of dividends without rebalancing positions. If dividends accumulate, then a decision must be made as to how to reinvest them. Dividends are not assigned to a particular stock: they come in and accumulate as cash in the strategy. They can only be reinvested if (a) a new stock is bought or (b) a rebalancing takes place, which would mean some shares are sold and others are bought. There’s no way to simulate a strategy that takes accumulated dividends and divides them in some fashion among the current holdings.