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Started By
Message
Why DRIPS?
Posted on 12/8/14 at 9:23 am
Posted on 12/8/14 at 9:23 am
I don't understand the popularity of drip programs. I have all of my positions at Fidelity to automatically set to reinvest dividends (stocks, mutual funds, ETFs). No charge on any of these.
What is the advantage of doing a DRIP program directly with the company?
What is the advantage of doing a DRIP program directly with the company?
5
Posted on 12/8/14 at 9:25 am to Ole War Skule
usually offer a small discount.
Posted on 12/8/14 at 9:28 am to Ole War Skule
You're essentially dripping.
There's not much of an advantage now that several brokerages offer direct reinvestment.
The only difference might be the ability to buy partial shares and the option to invest as little as $10 per month.
There's not much of an advantage now that several brokerages offer direct reinvestment.
The only difference might be the ability to buy partial shares and the option to invest as little as $10 per month.
Posted on 12/8/14 at 9:48 am to Ole War Skule
Because most of the drive by posters on this board got their investment advice from the 1960's.
Posted on 12/8/14 at 12:11 pm to bayoubengals88
quote:
The only difference might be the ability to buy partial shares and the option to invest as little as $10 per month.
I think this is the major advantage. Several major brokerage houses still don't offer partial shares on reinvestment.
Posted on 12/8/14 at 12:23 pm to Oenophile Brah
How does it work if you are set to reinvest dividends into security on Fidelity? Whst is done with the leftover dollars that are available but cannot buy a full share?
Posted on 12/8/14 at 12:34 pm to TigerTatorTots
quote:
How does it work if you are set to reinvest dividends into security on Fidelity?
I think Fidelity allows for partial shares though I'm not certain.
My experience with reinvest that didn't allow partial shares was with Smith Barney. The dividends were released into a checking/money market account that was set up at the beginning of the brokerage relationship.
One other point, the issue was only with dividends that aren't enough for a single share. Any dividend valued over 1 share would still receive shares and not cash. IIRC.
Posted on 12/8/14 at 1:45 pm to TigerTatorTots
quote:
Whst is done with the leftover dollars that are available but cannot buy a full share?
yes, fractional shares
Posted on 12/8/14 at 3:08 pm to Ole War Skule
I started out doing DRIPs.
They offered me a low cost way to dollar cost average into individual stocks.
After about 10 years, I closed my drip accounts and opened a discount brokerage account.
Sometimes I wish I had stayed with the automatic investing, but no my average trade is several thousand dollars rather than a monthly investment in multiple DRIPs.
I still have most of the positions I accumulated by DRIPping
They offered me a low cost way to dollar cost average into individual stocks.
After about 10 years, I closed my drip accounts and opened a discount brokerage account.
Sometimes I wish I had stayed with the automatic investing, but no my average trade is several thousand dollars rather than a monthly investment in multiple DRIPs.
I still have most of the positions I accumulated by DRIPping
Posted on 12/8/14 at 8:06 pm to makersmark1
Nothing keeps somebody from doing automatic investing with a discount broker.
Posted on 12/8/14 at 10:11 pm to Ole War Skule
As a novice just getting started outside of 401k, IRA, and Roth IRA, the no fee direct purchase plan with companies like Exxon was a great way for me to learn about dividends and the market as a whole. I plan on getting the kids started on a similar path once they learn basics about companies.
For small ongoing investments ($50 or $100 a month), a direct purchase with reinvesting option is a cheap way to get started. Why the negativity for people who want to save on fees as they get started?
For small ongoing investments ($50 or $100 a month), a direct purchase with reinvesting option is a cheap way to get started. Why the negativity for people who want to save on fees as they get started?
Posted on 12/9/14 at 5:33 am to Boh
quote:
Why the negativity for people who want to save on fees as they get started?
There was nothing negative about my question. I didn't understand why many people have direct DRIPs set up when they're available, and much more convenient, from most discount brokers.
If one is investing $50 or $100, direct DRIPs seem to make sense due to fees.
Posted on 12/9/14 at 8:09 am to Ole War Skule
quote:
There was nothing negative about my question. I didn't understand why many people have direct DRIPs set up when they're available, and much more convenient, from most discount brokers. If one is investing $50 or $100, direct DRIPs seem to make sense due to fees.
Sorry - I've just seen a handful of threads this year about why direct purchasing is inferior to going through a broker. Not yours specifically. I don't understand the hate sometimes.
This post was edited on 12/9/14 at 8:11 am
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