A Dividend Reinvestment Plan, abbreviated as “DRIP” is a very important portion of any dividend investor’s portfolio. As mentioned in my previous article, I utilize this service in my dividend investing portfolio.
Although there are many advantages of DRIP investing, there are also some disadvantages. In this article, I will analyse the pros and the cons of DRIP investing. But before all that, here is a short introduction to the program.
A Short Introduction: What Are DRIPs?
When an investor signs up for a dividend reinvestment plan, dividends received by the investor from the company will automatically be used to buy additional shares in the company. These additional shares may frequently come in the form of partial shares, which as its name suggests, represents an ownership of less than one share. The many advantages of such a scheme will be elaborated on below.
Currently, numerous blue chip companies ......