Until now, the biggest drawback of DRIPs has been the
difficulty of keeping track of the investments. But DRIP Wizard (software product for Windows 95, 98,
NT, XP) does all of the investment
tracking. With that barrier overcome, DRIPs are the best way for
most people invest in the stock market. Here are some of the benefits
that DRIPs offer to small investors:
DRIPs allow someone with a small amount of money to
purchase shares in small increments, without getting punished by
brokerage fees. Do you have some extra money at the end of the
month? Send one of your DRIPs a small check (as small as
$10-$25) or a big check (as much as $10,000). You can
relax, knowing that all of the money will be used to directly purchase
more shares (kept track of to the .0001 share).
Return on Investment is typically higher on DRIPs as
compared to traditional trading or mutual fund investing. This
is because brokerage fees do not take up profits and because DRIP
investors have the unique ability to take advantage of Dollar Cost Averaging.
With such low fees, it is easy to set-up your own
diversified portfolio. Diversification is a powerful way to help
limit your risk.
Learn more about investing. Once you enroll in a
DRIP, companies will send you their annual reports and quarterly
earnings reports. Follow the performance of your investments on DRIP
Wizard and gain a better understanding of stock performance.
For young people, DRIPs are a great way to get started
in stock investing. Give the best gift you can give a young
person. Buy him/her a few shares of a company that offers a DRIP
plan, help them enroll, and get them DRIP Wizard. As they
watch the stock's value increase and their holdings increase (through
automatic dividend reinvestments) through the years, they will learn to appreciate the
importance of investing.
Some DRIPs offer discounted stock price (usually 3 to
5%) on purchases from dividend reinvestments or optional
payments. This gives you instant yield.
Some DRIPs offer an automatic investment
option. This allows the investor to have a specified amount of
money withdrawn from his/her account each month. This is great
for those who want to follow a consistent and disciplined investment