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Long Post Warning-if anyone sees a correction that needs to be made or other helpful additions or deletions--please feel free to post them. My writing tends to the technical side and I'm a newbie with stock investing.

Ideas for the FAQ section:

Q. What are dividend reinvestment plans, or DRiPs?


Editorial note: One disadvantage is that you have no control over the timing and price of shares that are bought or sold through the DRiP plan. However, to take advantage of market dips, you can buy additional shares through a broker and transfer them to the DRiP.


DRiP-Dividend ReInvestment Plan
DPP-Direct Purchase Plan
OCP-Optional Cash Purchase/Payment
AT-Automated Transfer

Q. What are some things one should think about when getting ready to invest in DRiPs?


Q. What is a DPP(Direct Purchase Plan)?

A. With a DPP you can purchase stock directly from the company without having to first buy a share through a broker or other source. Most companies with a DPP also offer a DRiP.

Q. Where can I get information on DPPs and DRiPs?

A. Some internet sites which provide information are:

The Motley Fool

The Clearinghouse -lists companies with DPPs.

Netstock Direct -lists companies with DPPs and DRIPs. This site has a search engine, plan criteria and links to companies.

The Securities Transfer Association published a list of DPPs and links to Reuters MoneyNet data on the companies.

Moneypaper -information on DRiPs and includes a brokerage to help buy the first share.

The DRIP Investor -information and advice from Charles Carlson.

Stock1 -lists S&P 500 and Mid Cap
companies with DRIPs.

Q. How do I start a DRiP?


Editorial note: If you purchase your stock through a broker, you don't need to wait until you actually have the certificate in hand.
Another possible way to acquire the first share is to have it transferred from a friend or family member or if the company has a DPP to buy the share from the company.

Q How do I combine DRIPS with the Foolish Four?


Q. What kind of stocks should I invest in DRiPs?

A. Stocks that you plan to hold for the long term. This is a good way to get children interested in stocks so they can select stocks and watch "their" money grow.

Q. How do I cash in my DRiP?

A. There are a couple of options to withdraw from a DRiP. The first is to have the plan transfer any "whole" shares in certificate form to you and then liquidate any "fractional" shares. Then you can send the certificate to a brokerage company to sell. The second option is to have the DRIP sell the shares and forward the proceeds to you. If the DRIP sells the shares, there will usually be a $10-15 fee plus a commission cost/share and you have no control over the price the shares are sold.
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