03-29-2014, 07:05 PM
DRIP means you can dollar cost average with small amounts of money with little to no commissions.
Buying it outright through a broker means you have to,
1) Spend more money, otherwise the commissions take a big cut. $7 on $700 is 1%.
2) Pay a higher commission for the initial purchase.
3) Pay that same high commission if you want to add to the position.
It's a no brainer in my opinion, but not everyone agrees.
I guess if I had a bigger portfolio I might feel differently, but I'm not comfortable paying any commissions usually and I prefer to buy small and buy often.
If I really want something and there is no DRIP program I will pay commissions, otherwise DRIP.
I think the best advice is, find what works for you. What let's you hold onto your positions and sleep comfortably at night? Whatever that is, you should do it
Buying it outright through a broker means you have to,
1) Spend more money, otherwise the commissions take a big cut. $7 on $700 is 1%.
2) Pay a higher commission for the initial purchase.
3) Pay that same high commission if you want to add to the position.
It's a no brainer in my opinion, but not everyone agrees.
I guess if I had a bigger portfolio I might feel differently, but I'm not comfortable paying any commissions usually and I prefer to buy small and buy often.
If I really want something and there is no DRIP program I will pay commissions, otherwise DRIP.
I think the best advice is, find what works for you. What let's you hold onto your positions and sleep comfortably at night? Whatever that is, you should do it