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Do you participate in DRIP for your stocks?

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    Do you participate in DRIP for your stocks?

    Do you participate in DRIP for your stocks? If so why or why not? Trying to decide what to do for my Roth.

    Henry

    #2
    Yes. All of my dividends and capital gains are automatically reinvested.
    If I were retired, I'd probably take the dividends as cash from my ROTH
    Brian

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      #3
      Originally posted by bjl584 View Post
      Yes. All of my dividends and capital gains are automatically reinvested.
      Mutual funds? (Since stocks, bonds and ETFs can only be purchased in whole units, how would you automatically buy a fraction of one of those products?)

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        #4
        this might help.

        https://www.bogleheads.org/wiki/Rein...axable_account

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          #5
          Originally posted by Jluke View Post
          Very informative. Thank you!

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            #6
            Originally posted by Nutria View Post
            Mutual funds? (Since stocks, bonds and ETFs can only be purchased in whole units, how would you automatically buy a fraction of one of those products?)
            mutual funds and stocks.
            fractional shares of stock can be reinvested. I think you can only buy whole shares up front, but that doesn't apply to dividend reinvesting.
            Brian

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              #7
              Originally posted by bjl584 View Post
              mutual funds and stocks.
              fractional shares of stock can be reinvested. I think you can only buy whole shares up front, but that doesn't apply to dividend reinvesting.
              Interesting. Thank you.

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                #8
                Hmmm...what am I missing here? When I buy shares of stock, it's by the amount, such as $100, not by the number of shares. So I always end up with fractional shares.

                And I add to my mutual funds in increments of $100, so again fractional shares.

                That's different for other people?

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                  #9
                  Originally posted by frugal saver View Post
                  Hmmm...what am I missing here? When I buy shares of stock, it's by the amount, such as $100, not by the number of shares. So I always end up with fractional shares.
                  Stock shares, or mutual funds?

                  And I add to my mutual funds in increments of $100, so again fractional shares.
                  Seems like you're conflating "stock" with "mutual funds".

                  That's different for other people?
                  It's been a long time since I've bought shares in individual companies, but Back In The Day, when Louis Rukeyser was king and the ink was still wet on Apple stock certificates, you bought stock shares in lots of 100. Less than that was expensive. They'd look at you like you had five ears if you wanted to buy $100 worth of stock.

                  Even now, when you want to buy shares of an ETF, you must buy whole units, not fractions.

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                    #10
                    Originally posted by Nutria View Post

                    Even now, when you want to buy shares of an ETF, you must buy whole units, not fractions.
                    With an automatic investing plan (executed on Tuesday only) through capital one (sharebuilder) I can invest dollar amounts and receive partial shares.

                    I just bought $1000 of MO, 1400 of VYM and $1000 of VWINX. Plus two others but that shows a stock, ETF and mutual fund purchase of partial shares.

                    Depends on the brokerage.

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                      #11
                      Originally posted by Jluke View Post
                      With an automatic investing plan (executed on Tuesday only) through capital one (sharebuilder) I can invest dollar amounts and receive partial shares.

                      I just bought $1000 of MO, 1400 of VYM and $1000 of VWINX. Plus two others but that shows a stock, ETF and mutual fund purchase of partial shares.

                      Depends on the brokerage.
                      Interesting. With Schwab and Fidelity, I have to buy whole units of ETFs.

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                        #12
                        Some companies do let you buy fractional shares. Buyandhold.com was one of them, but they closed. All of my stocks that offer dividends are enrolled in DRIP.

                        Comment


                          #13
                          Okay, I'm apparently the only one.

                          My two stock purchase companies are Computershare and Wells Fargo Home Shareholder, although there are a number of others. They are very similar to the old BuyandHold in that you purchase your shares directly from the companies, often with no commission or fees whatsover. They have very low minimums--some stock you can purchase for $25 or $50 a month (with a commitment to purchase every month until a set amount is reached) and you can easily dollar cost average while building up positions in stocks.

                          These companies were designed for the "regular people" for whom opening a $2500 or $5000 brokerage account and then paying commissions was simply never going to happen, which is where I was way back when I started my first account.

                          Because they are only a payment system, everything else--researching, tracking stocks--is up to you, so they force you to actually learn how to invest rather than just jump on whatever everyone else is jumping on.

                          When I got further along, I did look at opening up a brokerage account somewhere. But, hmmm....why would I pay a trading fee to purchase stock that the company will sell me for free? So I still don't have a brokerage account. (Although I should add that since the recession a number of companies have been slowing add small fees to the transactions. At some point it may be worth it to pay the discount broker fee.)

                          These types of companies are for long-term holders of stock. Purchases can lag by 7 days or so, so jumping in and out of stock is out of the question. But since my average holding time is probably 10 years, they work fine for me.



                          https://www-us.computershare.com/investor
                          https://www.shareowneronline.com/Use...t/WFIndex.aspx

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                            #14
                            Here is an article about DRIP plans. Usually, a DRIP is offered by a corporation where you can buy shares commission free and reinvest the dividends.

                            http://www.investopedia.com/terms/d/...stmentplan.asp

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                              #15
                              As of last month I started taking my dividends as cash instead of reinvest. Planning on stacking up the money and then using it to rebuild my EF, and then with the balance I will continue to wack away at my mortgage.

                              It's hard to tell as some dividends pay quarterly and some of mine are monthly.... Also random earnings come in bi-annually/quarterly. My estimate is I should be collecting ~$350-450 a month. I hope I am making the right move for these. I don't want to be too greedy with growing my taxable account when I have mortgage and 2 cars to pay off.

                              *Retirement accounts are all still on DRIP though.

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