maddythebeagle
Thinks s/he gets paid by the post
- Joined
- Jun 15, 2005
- Messages
- 2,450
"If I had drips now I would only keep the ones giving discounts on purchase + no fees to purchase and dump the rest into an ETF or fund of my liking."
- very well said on this point. Some of these drips charge up to 5 bucks on optional cash purchases, which I would avoid since sending in 50 bucks a month would be a killer. That said many have no fees. It certainly isnt difficult to find quality utilities, banks, pharma, consumer and food stocks, and reits with no fees. Many of the reits have discounts on dividend reinvestment, also.
You also have to look at the brokerages, some only offer reinvesment on full shares (most dont offer on fractional and if they do, your brokerage fees are usually higher like TD Waterhouse). NOTE that dividend reinvestment is a big boost in total return.
Another point on drips is that it has to be fun for you. You have to keep the annual statement on each in a file and it helps to have a spreadsheet to add your cost basis. Also, selling parts of your holding can be a pain on figuring your cost basis, but there are ways around (sell the entire position and make sure it is all in a long term capital gains rate).
What I do when the drips start fees, is to have the shares issued and deposit in my brokerage account with free reinvestment.
http://www.dripinvesting.org/Boards/Boards.asp
fyi, is an excellent site to discuss drips.
- very well said on this point. Some of these drips charge up to 5 bucks on optional cash purchases, which I would avoid since sending in 50 bucks a month would be a killer. That said many have no fees. It certainly isnt difficult to find quality utilities, banks, pharma, consumer and food stocks, and reits with no fees. Many of the reits have discounts on dividend reinvestment, also.
You also have to look at the brokerages, some only offer reinvesment on full shares (most dont offer on fractional and if they do, your brokerage fees are usually higher like TD Waterhouse). NOTE that dividend reinvestment is a big boost in total return.
Another point on drips is that it has to be fun for you. You have to keep the annual statement on each in a file and it helps to have a spreadsheet to add your cost basis. Also, selling parts of your holding can be a pain on figuring your cost basis, but there are ways around (sell the entire position and make sure it is all in a long term capital gains rate).
What I do when the drips start fees, is to have the shares issued and deposit in my brokerage account with free reinvestment.
http://www.dripinvesting.org/Boards/Boards.asp
fyi, is an excellent site to discuss drips.
