DRIP Problems

[Star]

Hey guys,

I am currently invested in a few companies. I am looking at building a core for my portfolio.

I like using a platform to reinvest dividends automatically (although they take 1% commission).

The problem I am facing is with high cost stocks. Currently I plan to get some JNJ or PG in there, I want to invest around $5000 between them. When the dividends are paid they cannot be reinvested into fractions of shares, I can only invest if I have a full amount (JNJ around $97).

This means I will not benefit from compounding.

Any ideas on how to get around this?

Thanks

[rnsmth]

(04-02-2014, 08:48 AM)Star Wrote: Hey guys,

I am currently invested in a few companies. I am looking at building a core for my portfolio.

I like using a platform to reinvest dividends automatically (although they take 1% commission).

The problem I am facing is with high cost stocks. Currently I plan to get some JNJ or PG in there, I want to invest around $5000 between them. When the dividends are paid they cannot be reinvested into fractions of shares, I can only invest if I have a full amount (JNJ around $97).

This means I will not benefit from compounding.

Any ideas on how to get around this?

Thanks

Open an account at Fidelity or any of a number of companies that will gladly reinvest dividends into fractional shares with no commission cost. I mention Fidelity because it is the one we use

[EricL]

I use Sharebuilder and Schwab and they both reinvest at no cost.

I've also heard that Scottrade is a good site for dividend reinvestment.

[TomK]

Yeah, don't walk -- RUN -- from any brokerage that wants 1% to reinvest dividends. Plenty of places will gladly do that for free, fractional shares and all. I know Vanguard does, too, as another example.

[Star]

Thanks for the replies, Forgot to mention - I am in the UK..

[rnsmth]

(04-02-2014, 11:01 AM)Star Wrote: Thanks for the replies, Forgot to mention - I am in the UK..

I am in Mexico and use a US brokerage firm, but I started the account when I was in the USA

[cannew]

Don't know about the UK, but Computershare allows you to buy shares directly or you can transfer shares to setup drips. I'd contact the uk branch and see what they suggest.

[dividendventure]

(04-02-2014, 11:01 AM)Star Wrote: Thanks for the replies, Forgot to mention - I am in the UK..

Hi Star,

I am also a UK-based investor. Apart from investing directly in the companies' DRIP program, I could not find any broker in the UK that supported free automatic dividend re-investment. I believe Halifax sharebuilder supports fractional shares but I am not sure if they support them for US-based stocks.

Hope it helps!

[Star]

(04-02-2014, 04:16 PM)dividendventure Wrote:

(04-02-2014, 11:01 AM)Star Wrote: Thanks for the replies, Forgot to mention - I am in the UK..

Hi Star,

I am also a UK-based investor. Apart from investing directly in the companies' DRIP program, I could not find any broker in the UK that supported free automatic dividend re-investment. I believe Halifax sharebuilder supports fractional shares but I am not sure if they support them for US-based stocks.

Hope it helps!

Thanks for the replies everyone. Should have stated where I am!

Venture,

It's such a setback. I called fidelity the other day, they don't do fractional shares either. But on the flip side, they do not take a percentage of the DR.

What broker are you with may I ask?

Also, with regards to DRIPS directly, who do you use?

I've always thought that keeping track would be a tedious task. If something happened and I wanted to sell ASAP.

Thanks,
Star