DRIP Advantages

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  This allows the investor to have a specified amount of money withdrawn from his/her account each month.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 plan.