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Author: Rayvt Big gold star, 5000 posts Top Favorite Fools Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121061  
Subject: Re: Dividend Reinvestment - A Tax Nightmare? Date: 7/6/2008 11:00 PM
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Keeping accurate records over a period of decades is virtually impossible for normal people. You can't even use any kind of computerized records or computer spreadsheet. The programs to read the data will be obsolete in just a few years time. And all it takes is one time of forgetting to enter a quarterly transaction and you have incomplete data.

DRIPs were an arguable solution for something that was a problem years ago, but isn't anymore. To wit: high brokerage commissions.

It doesn't make much sense to me, either. A DRIP says that you see no better investment than this one company. But this is rarely (never?) the case.

These problems are in direct contradiction to one another.
On the one hand, you'd have to be so lazy that you don't bother to look for better stocks to own---you make a one-decision choice and never revisit it.

On the other hand, you are also so meticulous that you religiously keep track of every divident that is credited to you over a period of many years. In the case of a DRIP, you don't even get a check that you must cash, just a notice that the dividend was paid and how many shares you received in lieu of the cash.

FWIW, my dad was teh first and my mom was the second. She was anal-retentive to a fault in recordkeeping. But after 20 years it was impossible to figure out their actual overall cost basis for their PG&E stock.
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