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Author: Kcourt Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 8754  
Subject: New poll........ Date: 7/20/2004 1:06 PM
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The semi-yearly poll (created by former Fool member GLSmyth) is now available at

http://dripinvesting.org/choices/Poll/DCForm.asp

Please list your DRiPs, including Pseudo-DRiPs.

These polls are always interesting - It is fun to see what DRIPs are the most popular.

Kathy

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Author: desertdaveataol Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 729 of 8754
Subject: Re: New poll........ Date: 7/20/2004 6:16 PM
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Kathy,
I could find no way to communicate this info to them at the site. Maybe you can let them know the next time you're there.

Their poll does not recognize Aqua America WTR. I had to enter the old Philadelphia Suburban Corp. ticker (PSC) to get their computer to accept the info.

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Author: Kcourt Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 730 of 8754
Subject: Re: New poll........ Date: 7/20/2004 6:19 PM
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dave,

I did contact Geroge concerning WTR - I also own it as do many others on those boards.

This is the first poll since PSC became WTR.

Kathy

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Author: wysockiman Big gold star, 5000 posts Home Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 731 of 8754
Subject: Re: New poll........ Date: 7/20/2004 10:19 PM
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The polling site doesn't recognize AKR (Acadia Realty Trust, a REIT).

David

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Author: LittleGiant Two stars, 250 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 732 of 8754
Subject: Re: New poll........ Date: 7/21/2004 12:35 AM
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The site does not recognize CHS. Chico's Stores.

Little Giant

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Author: GinnyW Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 733 of 8754
Subject: Re: New poll........ Date: 7/21/2004 6:38 AM
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If your stock that you drip is not recognized email George Smyth on his site and he will add it. I don't believe he has access to these boards anymore.
Ginny

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Author: mrseabreeze Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 734 of 8754
Subject: Re: New poll........ Date: 7/21/2004 9:08 AM
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GLSmyth deserves a lot of thanks from many people -- including me -- for all the effort he has put into his site.

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Author: Kcourt Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 735 of 8754
Subject: Re: New poll........ Date: 7/21/2004 11:59 AM
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It is a great site - many former Fool members now post there -
IT IS FREE!

Kathy

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Author: jmcjls Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 736 of 8754
Subject: Re: New poll........ Date: 7/21/2004 2:14 PM
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The polling site doesn't recognize AKR (Acadia Realty Trust, a REIT).

It also didn't recognize O (Realty Income Corp), AMB (AMB Property Corp), and GPT (Greenpoint Financial Corp) All you have to do is submit the symbols that you can, then there's a "link" to a "contact us" type of hot spot. My e-mail browser popped up w/ an address & a subject line. I got a response from a human a few hours later.

E-mail:

webmaster@dripinvesting.org

Subject line:

ticker addition requested

jmc

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Author: SDMcR Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 737 of 8754
Subject: Re: New poll........ Date: 7/21/2004 2:22 PM
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It also didn't recognize O (Realty Income Corp), AMB (AMB Property Corp), and GPT (Greenpoint Financial Corp)

AMB appears to be a bit problematic for the site. If you look at the results page, it actually appears four separate times.

Susan


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Author: rkmacdonald Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 745 of 8754
Subject: Re: New poll........ Date: 7/24/2004 11:23 AM
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I never DRIP anymore for several reasons:

1. Record-keeping: Keeping track of your cost basis is a chore. Each time you reinvest your dividend, additional shares and fractions of shares are purchased. This changes your overall average cost basis, and must be tracked. Even if you are a buy-and-hold'er, there will probably come a day when you will want to sell, and after 20 years of dripping, it is very difficult to figure out your cost basis, unless you have meticulously tracked all your purchase costs through all the years.

2. Selling problems: If you want to sell some shares, you have to make sure you know the cost basis for the shares you sell. If you track only avaerage cost basis, when you sell, a portion of your sale will be short term, and short term income tax will apply to that portion. Also, selling a fractional share is not always as straightforward as selling whole shares. At E*Trade, for instance, to sell fractional shares, you have to fill out a form and send it to them stating what fractional amount you want to sell, and the price you got for the whole shares you sold at the same time. Even if you are a buy-and-hold'er, there will probably come a day when you will want to sell, and after 20 years of dripping, it is very tedious to verify your cost basis, which you have to do for the IRS, even if you have meticulously tracked all your purchase costs through all the years.

3. Is it the best investment?: Each time your dividend gets reinvested, you should ask yourself: Is this stock where I would invest new money if I were adding to my account? If the answer is always 'yes', then a DRIP is fine. In my case, I found that when I was dripping, a dividend would be reinvested, and I would find myself saying, "I wish I had that money to invest in XYZ".

Then, I came to the same conclusion as the previous poster. I decided to stop dripping and simply let my dividends accumulate in a MM account waiting until I find something I wanted to invest in. That could be a year or two.

This has the added benefit that you always buy whole shares and never have the problem of trying to sell any fractional shares. Many times, I do reinvest in the same company that issued the dividends after a year or so goes by, when the stock has 'dipped' down in value. In those cases, if I had dripped, I would have bought shares at much higher prices.

By the way, dripping into REITs adds another level of confusion, because a portion of a REIT's distribution is 'Return of Capital', which decreases the cost basis. Unless you are extremely careful, you can end up with a royal mess when you drip into a REIT. I had one case, where I had so many changes to my cost basis that I simply gave up and paid federal income taxes on the entire sales price rather than try to unravel the mess.

The only negative I know of when you accumulate dividends and buy something else, is that you have to pay a commission on each purchase. However, if you accumulate enough dividends to keep your commission costs down to about 1% of your purchase, it won't hurt you (ie, $900 purchase @ $9 commission). Also, the commission cost can usually be offset by buying on the dips.

Russ

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Author: corvinojm One star, 50 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 746 of 8754
Subject: Re: New poll........ Date: 7/24/2004 12:28 PM
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Russ,
I basically treat my dividends as you describe--even though I avoid a lot of the hassles you describe beccause all of my investments are in tax sheltered accounts.

I just wanted to tell you how much I appreciate the clarity of thought and the clear organization of your posts.

Thanks,


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Author: missash Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 747 of 8754
Subject: Re: New poll........ Date: 7/24/2004 1:06 PM
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Russ, a negative of accumulating dividends in a money market account until you have enough for a new purchase, not mentioned by you, is that one is essentially reinvesting at a sub-one percent rate. With high dividend paying stocks like Reits, DRIPing would result in reinvesting at the then current dividend rate (? 5-6% ),or even higher for those few companies that have discounts on their DRIP plans (e.g. CLP, HCN, MNRTA).

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Author: rustybell Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 749 of 8754
Subject: Re: New poll........ Date: 7/24/2004 7:13 PM
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Russ:

An excellent post and you make very good points! Beyond what missash pointed out I have another reason for DRIPs personally in the near term. Simply put, I don't have sufficient capital ready at hand to establish the intended eventual positions I want. So until I reach those goals/levels, I intend to DRIP and put up with the tedium/hassle. At that point your well-articulated p.o.v. may very well become my tactic as well. BTW My long term goal is passive income in retirement.

And although I see the advantage of putting these types of holdings within a tax-deferred account, I intentionally did not do so because I want the potential liquidity should a need arise. I'd previously allocated all my investments to IRA & 401-k accounts which put them out of reach...I'm not at all interested in taking the penalty for early distribution.

Rusty

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Author: GinnyW Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 750 of 8754
Subject: Re: New poll........ Date: 7/24/2004 9:41 PM
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Russ,
I drip and don't have trouble with record keeping because I keep track of it on my computer. I have sold some parts and some whole drips and there is this thing that the IRS lets you use called various for dates of buys. I reinvest because I like to. I also reinvest my stocks that are in my IRA. I intend someday to collect my dividends but intil then I will continue to reinvest them.
Just another point of view.
Ginny

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Author: rkmacdonald Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 752 of 8754
Subject: Re: New poll........ Date: 7/25/2004 6:18 PM
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Author: corvinojm | Date: 7/24/04 12:28 PM | Number: 746
I basically treat my dividends as you describe--even though I avoid a lot of the hassles you describe because all of my investments are in tax sheltered accounts.

You bring up a very good point. Most of the hassles with DRIPing go away inside a tax sheltered account, like an IRA.

However, inside an IRA, you can't take advantage of the current low Fed Income Tax rate on dividends. Everything you withdraw from an IRA (probably after you retire) is taxed at your full marginal rate. So, inside my IRA, I try to hold things that don't get the special dividend tax rate (like REITs, bonds, and bond funds). I try to hold securities that get the special tax rate on dividends, outside my IRA.

But, if most of your retirement savings are in IRA's, then it is more important to maintain your chosen portfolio allocations than to worry about eventual taxes.

Russ

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Author: rkmacdonald Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 753 of 8754
Subject: Re: New poll........ Date: 7/25/2004 6:49 PM
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Author: missash | Date: 7/24/04 1:06 PM | Number: 747
a negative of accumulating dividends in a money market account until you have enough for a new purchase, not mentioned by you, is that one is essentially reinvesting at a sub-one percent rate. With high dividend paying stocks like Reits, DRIPing would result in reinvesting at the then current dividend rate (? 5-6% ),or even higher for those few companies that have discounts on their DRIP plans (e.g. CLP, HCN, MNRTA)

It is true that when you collect dividends in a money market account, they don't earn as much as they would have earned had they been reinvested by DRIPing. However, let's examine how much less that really is.

Let's assume you have a portfolio of stocks worth $100,000 that are paying 6% annual yield (like REITs), and you receive four quarterly dividend payments of $1,500.

Assume the money market account is earning 2%.

Assume you will accumulate dividends for one year and then reinvest them.

If you put that money in a money market account instead of DRIPing, the 1st quarter interest payment from the money market fund will be in for 3/4th year; the 2nd quarter will be in for 1/2 year; the 3rd quarter will be in for a 1/4th year and the last payment will be immediately reinvested. The net result is that the average period of time that the dividends will be in the money market account is only 1/2 year. And the same analysis can be applied to DRIPing.

So, for the $6000 in dividends received, the money market account will generate 1% in interest (for a half year), which is $60, and the DRIPing will return 3% in dividends, or $180.

So, by not DRIPing, it will cost you approximately $120 per year on a $100,000 portfolio of REITs, or 0.012%. And, this amount will be less with smaller portfolios and lower yielding stocks. Also, money market interest rates are rising. If they get up to 3% annual interest, then the difference becomes truely negligible.

To me, it is well worth this small cost to avoid the record-keeping problems associated with DRIPing.

Russ

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Author: rkmacdonald Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 754 of 8754
Subject: Re: New poll........ Date: 7/25/2004 6:51 PM
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Author: rustybell | Date: 7/24/04 7:13 PM | Number: 749
I don't have sufficient capital ready at hand to establish the intended eventual positions I want. So until I reach those goals/levels, I intend to DRIP and put up with the tedium/hassle. At that point your well-articulated p.o.v. may very well become my tactic as well.

Excellent point and perfectly valid. It's certainly not impossible to keep track of cost basis. Just a hassle.

Russ

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Author: rkmacdonald Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 755 of 8754
Subject: Re: New poll........ Date: 7/25/2004 6:56 PM
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Author: GinnyW | Date: 7/24/04 9:41 PM | Number: 750
I drip and don't have trouble with record keeping because I keep track of it on my computer. I have sold some parts and some whole drips and there is this thing that the IRS lets you use called various for dates of buys. I reinvest because I like to. I also reinvest my stocks that are in my IRA. I intend someday to collect my dividends but intil then I will continue to reinvest them.

I agree that it's not difficult to track your cost basis with a computer. That's the way I was doing it, using Quicken. Then, we had a disk crash, and lost my Quicken database. That's when I realized how difficult it was to go back and locate all that data again.

If you are dripping and depending on a computer, you better be sure to do a regular back-up!

Russ

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Author: GinnyW Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 757 of 8754
Subject: Re: New poll........ Date: 7/25/2004 10:11 PM
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Russ,
I do. I also keep each yearly statement from the end of the year that has all the data on it. That way I think I'm covered.
Ginny

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Author: desertdaveataol Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 762 of 8754
Subject: Re: New poll........ Date: 7/26/2004 10:54 AM
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At Schwab it is $29.95 + $3.00 order processing fee (I thought that that was what the $29.95 covered - the order) for up to 1,000 shares.

So why have two accounts? Seems to me you've just made a very good case for going with Scott Trade. In my limited experience, discount brokers play fewer (I've experienced none) expensive games than the "full service" brokers like Schwab.

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