Why invest in DRIPs?
DRIPs are a great way for the small investor to get ahead. DRIPs allow you to build holdings in a company frequently, over long periods of time. Shares are purchased whenever the company pays a dividend and whenever you opt to send them a check. There are several distinct advantages to investing this way: • no brokerage fees: In traditional investing, the more you trade, the more the broker takes. In DRIPs, there are no fees. You can acquire shares as frequently as once a month. Your principal isn’t eroded by brokerage fees. For the small investor, even discount fees can take a serious piece of the investor’s principal. • dollar cost averaging: By purchasing frequently over long periods of time, you gain a statistical edge that is likely to help enhance your yield. The general concept is that if you regularly invest a consistent amount for each purchase, you will buy more shares when the stock price is lower and less when the stock price is higher. This edge can help to improve your yi
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