Re: DRIPs

From: Douglas Gerlach <gerlach@investorama.com>
Subject: Re: DRIPs
Date: Fri, 04 Sep 1998 11:04:31 -0300

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At 08:30 AM 9/4/98 -0600, you wrote:
>
>Over the next 2-4 weeks, I began receiving the certficates and checks.
>I then simply endorsed over the formers and deposited the latters into
>the brokerage account (and of course signed up for free reinvestment of
>dividends for all stocks/funds held in the account).  Voila!
>
>As I stated in my previous, I utilized DRIPs to enmass equity a little
>at a time (from nothing), without being swamped with commissions on such
>small contributions.  I, too doubt I'll need to use them again myself,
>now that I've established a brokerage account from same.

If you do this, you lose the ability to invest with no commissions. The
opportunity to invest in shares of stock with *no* commission is the real
advantage of DRIPs -- not the reinvestment of dividends. Even at $12 or $7
commissions per trade, you have to invest several hundred dollars before
the commissions become small enough to have only a minimal impact on your
portfolio. Fees and commissions have a direct impact on your investment
returns.

_____________________________________
Douglas Gerlach
Invest-O-Rama!, http://www.investorama.com
DRIP Central, http://www.dripcentral.com
Investment Club Central, http://www.iclubcentral.com
Investor's Web Guide, http://www.investorama.com/guide

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