Dividend Re-Investment Plan (DRIP) allows existing shareholders of the stock to choose between cash dividends OR reinvestment into additional shares (“bought” from the company) on the dividend payment date. Most DRIPs allow the option of taking additional shares, usually commission-free and at a significant discount to the current share price. DRIPS of water forming an extensive resource pool For investors, it also means automatic compounding of returns take place over the long term – when dividends are increased, shareholders receive more as the number of shares had increased. For the company, it creates more capital for the company’s deployment. Secondly, shareholders who opt for shares in a DRIP are less likely to sell their shares when the stock market declines as they recognise the role of their dividends play in their portfolio growth. Less cash distributed for a larger share base. The big question for some newer investors is...