Ganesh Kumar

Now Is the Right Time for a DRIP

The reason DRIP is better is that the investor need not have to monitor the stock prices once the initial investment is made. The dividends are automatically reinvested periodically. My analysis has shown that if you have made the initial purchase at the right price, paying a little higher price later when you reinvest dividends should not affect the average cost that much. The trouble in taking out the discipline by accumulating cash dividends and waiting to buy at the right price is just that, determining the right price. If there is not overall strategy governing such repurchases you may end up with just cash not accumulating the shares.

Anyway the point of the article was to look at the brighter side of today's low prices and it is that DRIP investors are able to accumulate more shares than ever and that will benefit the DRIP investors in the long run.