![]() ![]() Over the long-term, the price you pay averages out.įor example, if you buy one share at a great value during one quarter, but the price skyrockets next quarter, the amount you invest averages out. With dollar-cost averaging, you’re not aiming to buy a stock at its lowest price. This protects you against the highs and lows of market volatility. #2 Protect Yourself from Market VolatilityĪlso called dollar-cost averaging, DRIPs let you invest at regular intervals in consistent amounts. DRIPs let you slowly increase your ownership in the world’s best companies without breaking the bank. This means that you can continue growing the number of shares you own, even if you can’t afford one full share of the equity. When you reinvest your dividends through DRIPs, you can purchase fractional shares.Īll your dividends get reinvested, regardless of the current share price. Benefits of Dividend Reinvestment Plan #1 You Don’t Have to Buy Full SharesĬonventional investing methods require you to pay the full price of the share. Can you REALLY be a part-owner in the world’s best companies?ĭRIPs have their benefits and are worth exploring - especially if you’re new to investing and want to automate your investments.īelow are some pros and cons of DRIPs to keep in mind.Are DRIP stocks worthy of your attention?.Two questions we’re going to answer this section: Are DRIPs a Good Idea? Are DRIP Stocks a Good Investment? And if given enough time, DRIPs can yield massive returns. It’s an invaluable tool for long-term investors, allowing them to invest with convenience and efficiency. ![]() Everything You Need to Know About DRIP Stocks What is DRIP in Stock?Ī dividend reinvestment plan, or DRIP for short, is a system that investors use to automatically reinvest their dividends into additional shares of the same stock.
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