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

Here you go:

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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.

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.

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!