Lux Investing

Anyone knows what a DRIP investment is? Is it a good or bad way to invest in? What are the Pros and Cons?

Investment

Public Comments

1. A Drip investment is when you recieve a dividen and instead of getting the cash for the dividen it buys your more shares of the stock. DRIP ( dividen reinvestment ). If it is good or bad, you might want to speak with a investment consultant, and a tax advisor.
2. I was going to do this with Pfizer but I decided against it. They deduct a certain amount from my paycheck and they buy me shares at the lowest price of that day. Other plans vary. So to me it sounds pretty good. Now if I wanted to sell out though, I pay $25 flat fee and .13 per share that I own. Let's say that I invested $1000 and I had 43 shares. If I wanted to sell that out, I would be paying $30.59. Not bad but if I did not do this plan, I could sell off all those shares for $4.50 plus I don't have to deal with canceling papers and the money goes into my account immediately. What if the investment is no longer attractive? Whether you do a DRIP or receive your dividends, you still get the 15% tax on the dividends. If you don't like paying attention to your investments then go for it. If you are like me, then you will not want your money locked up and reinvest your dividends freely into whatever you want. Nothing wrong with DRIPs! If I am getting taxed the same and the difference is saving a little more in fees and having complete freedom, then I am going that route.