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For those that have been considering DRIP programs

is it me or drip is just a style of investing, not really a "PROGRAM". I have a portfolio of companies that each have different dividend yeilds but I setup through etrade to automatically reinvest all dividends. So on top of the appreaittion iam putting back another another 3% back into the portfolio to grow.
 
fourth.hung said:
is it me or drip is just a style of investing, not really a "PROGRAM". I have a portfolio of companies that each have different dividend yeilds but I setup through etrade to automatically reinvest all dividends. So on top of the appreaittion iam putting back another another 3% back into the portfolio to grow.
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Well you are doing the same thing as those who do direct investment in the company but you pay a bigger commission for the shares purchased. I am not sure if Etrade does but most brokers don't allow you to buy fractional shares as the direct investment strategy does. They allow the dividend to accumulate till it can purchase 1 share. If you happen to generate a significant dividend then it will purchase whole number shares and leave the remaining cash. They problem with that is if you have a stock whose share price is high and the dividend is not decent enough then it takes a long time to buy that 1 share.

I had some shares of IBM and I sold them off and left only a fractional share. I think it was 0.3+ share and every quarter that fractional share receive a dividend which is re-invested. You would have not been able to do that at the traditional broker because they don't allow fractional shares. Eventually my fractional share is going to reach 1 share and then if I leave it and never touch it significant.
 
kjxxxx said:
Well you are doing the same thing as those who do direct investment in the company but you pay a bigger commission for the shares purchased. I am not sure if Etrade does but most brokers don't allow you to buy fractional shares as the direct investment strategy does. They allow the dividend to accumulate till it can purchase 1 share. If you happen to generate a significant dividend then it will purchase whole number shares and leave the remaining cash. They problem with that is if you have a stock whose share price is high and the dividend is not decent enough then it takes a long time to buy that 1 share.

I had some shares of IBM and I sold them off and left only a fractional share. I think it was 0.3+ share and every quarter that fractional share receive a dividend which is re-invested. You would have not been able to do that at the traditional broker because they don't allow fractional shares. Eventually my fractional share is going to reach 1 share and then if I leave it and never touch it significant.
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i happen to know they do buy fractional shares I dont know about selling fractional shares though, i think when u sell a stock you own fractional shares in, they sell your fractional shares along with the shares you sell of that security. my JP Morgan that was with Brown & Co. account also did this.
 

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