Save for Your Future
Consider DRIPs or DRPs A dividend reinvestment plan
1sometimes referred to as DRIP or DRP, is a small-investment option that offers investors the opportunity to buy stocks directly from companies without the use of a broker. These programs typically allow you to participate as long as you can afford to buy at least one share.
Some other benefits include:
Some other benefits include:
- Dollar-cost averaging: You can invest a specific dollar amount — say $10 or $25 — on a monthly basis. By investing regularly, you’re buying during all points of the market — both when it’s up and when it’s down. This concept of dollar-cost averaging is key for long-term investing as it gives you a more representative return over time; that is, your average cost per share represents the higher prices when it’s a bull market and lower prices when it’s a bear market.
- Dividend reinvesting: As the term suggests, dividend reinvesting means dividends paid by the company are reinvested in your holding, which will allow you to buy more stock. Dividends are simply earnings that the company pays out to its shareholders.
- Little to no fees: There are DRIPs that don’t charge any fees at all, though some do charge a small fee for ongoing contributions and dividend reinvestment.