DISQUS

Miranda · 2 months ago

I'm actually rather fond of DRIPs. They offer a great way to keep building your portfolio. And I've noticed that my DRIPs continue to provide gains, even during this recession. Some of the dividends have been cut, but at least they're still there. The DRIPs in my portfolio are a major reason that my IRA didn't lose as much as some of my friends' IRAs.

FFB · 2 months ago

I've always heard how DRIPs can be great investment vehicles. I'll definitely have to look into them again.

So is Computershare just something the companies use for their shares or can I go to Computershare to look up stocks?

MyJourney · 2 months ago

I am with FFB, is there a central location to start investing in DRIPs? Or do I have to contact the company themselves?

wayne · 2 months ago

I have been dripping for quite some time. Love it for the dividends (pay me to own the stock) and the free reinvestment of it. Some had no fees while others had some but minimum. After a while, it came to a point where I had quite a few (12 stocks) to keep track of and best solution for me was to move them over to a single brokerage house (one that allows reinvestment).

good place to look at would be at http://www.directinvesting.com/

MoneyEnergy · 2 months ago

@FFB - Computershare is one of the transfer agents, which act like the administrative assistants for these programs. Wells Fargo is another one, and Bank of New York Mellon is another. Yes, I think you can go right to these companies and skim through lists of the plans they offer.

@MyJourney - unfortunately, no central location. If you like a company, check their website under "Investor Relations" for 'shareholder services" or "stock information" - that's usually where they will say whether they have a DRIP plan or not, and will usually give you the info on how to enrol.

Jim · 2 months ago

I really do like the idea of a DRIP in general. But theres 2 things that I don't like about them.

Fees can be high. Some have very low or $0 fees, but other companies can have hefty fees for DRIP paticipation.

Figuring the cost basis of your stock can get pretty complex. For example put $5000 into Exxon and do a DRIP. You'll get roughly $30 a quarter in dividends which will buy you around 0.5 shares. So after 10 years you've got 40 purchases of stock at different cost.

Roger · 2 months ago

Pretty good information. I've considered DRIPs in the past, although the difficulty in creating a diverse portfolio in this method (as well as the ease of using most online brokers instead) stopped me from getting very far with my plans. Oh well, perhaps I'll have to give them another look.

Kevin · 2 months ago

I've been a DRIP Investor for years. Highly recommend this site for learning: http://www.dripinvesting.org

I also happen to disagree with Roger's assessment that it's hard to be diversified. I have about 26 stocks in my DRIP portfolio, and am very well diversified, moreso than I would be with board lot purchases, as I could only afford so many, and much more so than with mutual funds as most mutual funds tend to stick to the same stocks if you actually take the time to read into their holdings. It negates any benefit. Not to mention that I don't want to pay to invest. I carefully avoid fees, yet there are hundreds of companies to choose from with no fee plans.