- My Forums
- Tiger Rant
- LSU Recruiting
- SEC Rant
- Saints Talk
- Pelicans Talk
- More Sports Board
- Fantasy Sports
- Golf Board
- Soccer Board
- O-T Lounge
- Tech Board
- Home/Garden Board
- Outdoor Board
- Health/Fitness Board
- Movie/TV Board
- Book Board
- Music Board
- Political Talk
- Money Talk
- Fark Board
- Gaming Board
- Travel Board
- Food/Drink Board
- Ticket Exchange
- TD Help Board
Customize My Forums- View All Forums
- Show Left Links
- Topic Sort Options
- Trending Topics
- Recent Topics
- Active Topics
Started By
Message
re: Why are drips so popular here?
Posted on 7/13/14 at 8:25 am to Joshjrn
Posted on 7/13/14 at 8:25 am to Joshjrn
quote:
I'm still waiting for someone to explain to me what I get out of a DRIP that I don't get from a blue chip vanguard mutual fund set to reinvest dividends, other than less diversification.
There are many drips with higher dividends than VYM or other ETF/funds. I'm not disagreeing with you. I hope to own both.
Some people hold dozens of drips and draw dividends monthly (not that I would ever want to deal with that hassle).
I guess you could theoretically own 40-50 ETF's too?
1
Posted on 7/13/14 at 9:01 am to bayoubengals88
The point is that dividends and yield are only part of the total return on a stock. There are other large cap companies, and the S&P as an index, that give you a total return very close to or greater than the best group of companies invested via drips. With a lot less diversification risk.
For the average investor, this is the best way. Buffett argues the other way, but then he's Buffett.
ETA: Not to mention you're paying taxes on all of these dividends.
For the average investor, this is the best way. Buffett argues the other way, but then he's Buffett.
ETA: Not to mention you're paying taxes on all of these dividends.
This post was edited on 7/13/14 at 9:10 am
Posted on 7/13/14 at 11:38 am to Sigma
Are there people here under the illusion that they cannot get their dividend reinvested by brokers??
I rather have the ability to buy when I wanted and sell when I wanted than to have to comply with the buy and sell policies of the companies.
I would only do DRIPS if I was dealing with very small amounts of money.
I rather have the ability to buy when I wanted and sell when I wanted than to have to comply with the buy and sell policies of the companies.
I would only do DRIPS if I was dealing with very small amounts of money.
Posted on 7/13/14 at 12:18 pm to I B Freeman
quote:
Are there people here under the illusion that they cannot get their dividend reinvested by brokers??
Why do you want to pay a broker when you don't have to?
quote:
I would only do DRIPS if I was dealing with very small amounts of money.
Why? What does the amount have to do with it?
Posted on 7/13/14 at 12:27 pm to Zach
quote:
Why do you want to pay a broker when you don't have to?
Very few drips are free but what's $8 or $9 to have access to your property on demand? and available to margin if you wish? and to sell the moment you want to sell? You can really get hurt buying or selling on the company's timetable--more than you can save using the drip. Most of the company's drips use average daily price or something to settle transactions.
The only advantage I see to drips is the cost savings on the transactions is significant on very small amounts of investments. On a $50 investment the $1 or $2 a drip charges is much less than the $6 or $9 you would pay a broker. On a $1000 investment it is immaterial compared to the advantages of using limit orders or things like that with a broker.
This post was edited on 7/13/14 at 12:28 pm
Posted on 7/13/14 at 12:56 pm to Zach
quote:
Why do you want to pay a broker when you don't have to?
You can trade in ETFs and mutual funds without paying a penny.
Buying or selling.
And I have honestly never heard of any brokerage that charges a fee to reinvest dividends. Even the ones that charge a commission for trades.
So that isn't a benefit/advantage inherent to DRIPS
This post was edited on 7/13/14 at 12:58 pm
Posted on 7/13/14 at 1:55 pm to I B Freeman
quote:
Very few drips are free but what's $8 or $9 to have access to your property on demand? and available to margin if you wish? and to sell the moment you want to sell? You can really get hurt buying or selling on the company's timetable--more than you can save using the drip.
Don't know if that's the case or not. Don't care. Because I've never sold a stock in my life. I only buy and hold. Drips are fine for that.
Posted on 7/13/14 at 5:16 pm to I B Freeman
How do you go about purchasing drips
Posted on 7/13/14 at 5:29 pm to ragacamps
quote:
How do you go about purchasing drips
DRIPS are simply programs offered by public companies to buy their stock. You don't get any discount or special treatment if you buy it direct. The transaction fees to make the buy are cheaper than traditional brokers but you can't buy and sell at the exact times you want too.
Nobody has presented an advantage to drips here that is worth it to me. I happen to use Ameritrade and can buy a stock right now if I want and it cost me no more than $9 and my dividends are reinvested for free.
This post was edited on 7/13/14 at 5:34 pm
Posted on 7/13/14 at 5:39 pm to I B Freeman
quote:
I happen to use Ameritrade
I prematuraly opened a roth with Ameritrade a couple weeks ago but decided to go with fidelity. Anyway I never put a penny in it and when I was closing it the rep on the phone basicaly told me Im an idiot and said ,"ok I'll have it closed as soon as we are off the phone". Before he finished saying the word phone, he hung up the phone. Guy really pissed me off. I was going to keep an account with them to use as a brokerage account but he blew it.
Page 2 of 2
Popular
Back to top
Follow TigerDroppings for LSU Football News