Dividend Reinvesting or Not?

I was thinking for a while to reinvest dividends automatically or not.

I used to reinvest dividends automatically. Then I decided not to reinvest it automatically since I plan to sell stocks at some point and so I didn't want to have short term sale of investment.

Now I got another idea.

I put on automatic reinvestment of dividends all my Retirement accounts (IRA, Roth and SEP) because I mostly invest into these accounts at the moment I prepare my taxes. So if I would not reinvest automatically small amounts of cash would accumulate through the year while if I reinvest them I will get more stocks without paying commission and it slowly would increase my dividend pays.

But for my stocks in regular brokerage account I set my settings on to "not to reinvest dividends". 
If you asked me why? First of all I do at least 2-4 trades per month, so I can always use my dividends to acquire new stocks. As I always say I like to buy stocks when they are on sale. If I just let my settings to reinvest automatically my dividends pay into the same stock I would save on the trade cost and get more stocks, but sometimes it can be at high price. On the other hand I could add this amount to my trade for stocks, which are on sale and it would be a better deal.


I was reading an article in Kiplinger on the same subject. Columnist Kathy Kristof was trying to decide to keep reinvesting dividends into the stock or start using these money for investing into new stocks. Her reasoning was that if she would not reinvest her dividends into the same stock, then this stock would look like a "huge underperformer". She asked readers opinion on this subject.

So today while reading through studying material for my CPA test I got an interesting way to account for cost basis for Dividend stocks with dilemma like this. You supposed to use this type of accounting for Equity stocks, but I thought it might be a way for your own internal use.

Every time I receive dividends I will subtract it from my original cost of investment. For example, I paid for XYZ stock $1,300. So this is supposed to be my cost basis. Next month I received dividends in amount of $14. So now my new cost basis is going to be $1,286 and so on. So at some moment I will see that my stock totally paid off for itself.

So what do you think? Please share your thoughts on dividends reinvestments.