What should i be looking for in a stock if i want to start a DRIP? I like the idea of a monthly purchase, but i do not know the difference between good or bad drips. I'm relatively new to investing, so i would appreciate any advice. Thanks
|
- Email Topic
- Text Only
- Search this Topic »
- switch to 'Classic' view
- Page :
- 1
-
- NWcamp
- New Member
-
- Quick Summary
- view history
posted: Apr. 26, 2008 @ 10:35a 
Quick Summary is created and edited by users like you... Add FAQ's, Links and other Relevant Information by clicking the edit button in the lower right hand corner of this message.
-
- quaters
- Senior Member - 1K
-
- ThursdaysChild
- Grumpy Batman
NWcamp: after you've done your research using the link quaters provided, why not come back here and share your knowledge?
-
- verruckterBaum
- Senior Member
In this day of low/zero cost investing, I don't understand the desire for DRIPs that pops up so often. I don't pay commissions for stock purchases anyway (thanks Wells Fargo) so I could emulate reinvestment anyway. Plus I have the flexibility to allocate those funds differently so I can keep my portfolio where I want it, not at some arbitrary growth pattern based on dividends.
-
- xerty
- Senior Member - 1K
Plus, aren't DRIPs a big pain when it comes to figuring your tax basis for selling eventually? Seems like it might make sense for an IRA (if you really want a DRIP), but probably not worth the hassle for a taxable account.
-
- dolmar
- Senior Member - 4K
Most brokerage firms including Wells Fargo and Bank of America both who offer free trades also offer free dividend reinvestment. Those dividend reinvestment do not count towards the free trade.
And as far as cost basis most brokerage firms keep your cost basis for you and if you use a program like Quicken or Money it will keep that information for you too. And places like Citigroup, Bank of America, Chase support direct connection feature in those programs. So They will enter the info correctly into the program for you. It will categorize the transaction correctly so it will show up as dividend paid and then as dividend reinvestment back into the stock.
Then when you run a report in the program it will show you which shares have long term and short term capital gains, how many shares were gained via dividend reinvestment, how much qualified dividend you had etc.
Ofcocarse they only waives the Quicken/Ms Money fee if you have a certain amount of assets with them but if you are buying and selling stock and so concerned about dividend reinvestment etc I am going to assume you have at a min $25k between all your brokerage and banks accounts at the institution in question as that is the minimum amount required to waive the fee via BOA, Chase requires $100k and Citigroup requires $250k.
Message edited by: dolmar on 2008-04-26 13:56:00 CDT-
- maddybeagle
- Greedy Member
verruckterBaum said:In this day of low/zero cost investing, I don't understand the desire for DRIPs that pops up so often. I don't pay commissions for stock purchases anyway (thanks Wells Fargo) so I could emulate reinvestment anyway. Plus I have the flexibility to allocate those funds differently so I can keep my portfolio where I want it, not at some arbitrary growth pattern based on dividends.
I agree with this but maybe OP is just starting out and does not have the 25k to start a wells fargo account...
I have participated on this site and used drips in the past starting out...http://dripinvesting.org/
I mainly use wells trade with the free trades....I would also mention that a lot of drip plans charge excessive amount of fees and used to get a free lunch on many of them...
Message edited by: maddybeagle on 2008-04-26 14:53:58 CDT-
- NWcamp
- New Member
i just wanted to thank everyone for the replies. I can't say i learned whether or not DRIPs are a good investment, as i've seen with most investment topics, there are many different views. I guess the only way to find out is to actually do it. I'm trying it with several companies, and i'll reevaluate after a couple of years. But basically, i like it because i don't have 25,000 sitting around (if i did, i wouldn't be asking about them!) and i can start small. Only time will tell!
Close
|
 |
|
|
- Page :
- 1
Disclaimer: By providing links to other sites, FatWallet.com does not guarantee, approve or endorse the information or products available at these sites, nor does a link indicate any association with or endorsement by the linked site to FatWallet.com.
- FatWallet, inc.
- Site Map
- Contact Us
- Advertise
- Partnership
- Privacy
- User Agreement
- D.M.C.A. Notice
- Civil Process Policy
While FatWallet makes every effort to post correct information, offers are subject to change without notice. Some exclusions may apply based upon merchant policies.
- © 1999-2008
