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No. of Recommendations: 1
I'm looking into starting DSP/DRP with one or more of the following:
Independent Bank Corp Mass (INDB)
Washington Mutual (WM)
Banco Popular (BPOP)

Anyone out there have any experience with these stocks?

Foolishly, Jen Powell
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No. of Recommendations: 3
Aren't these stocks all in the same industry? I don't think its good to have all of your stocks in the same industry. When you go into different industries, your risks are drastically lowered.

a07843
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No. of Recommendations: 11
I only have experience with BPOP. What do you want to know about it? It has a fee-free DRiP, the statements are bi-lingual. I believe in it, of course. $25 minimum OCPs invest around the middle of the month... anything else?

exilion
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No. of Recommendations: 16
Perhaps jenpowell has narrowed down her prospective list and wants feedback on the finalists? If there is a tie for best of three, she can flip a coin or participate in each.

Risk by diversification is mitigated only to a certain degree, and it depends on the companies you choose. If you DRiP BPOP, WFC, and AMX (examples only, not a recommendation) you have essentially three banking stocks. However, you are diversified in the Financial Services sector. While each is a bank essentially, they each draw more of their business from a different aspect of the generic banking category. Picking companies in totally differentiated industries not only mitigates your risk to a higher degree, but in turn puts a drag on your portfolio's performance. One group flies high while the other drops as much, you break even. Generally, it isn't that perfect, but this is only a simple, virtual, hypothetical example.

Another risk mitigator is time. The more time you have, the less price fluctuations matter. Unless you are personally certain that the price will never advance higher within your time horizon, or have a better investment idea to plow your gains in to, and to take advantage of what you personally may view as an oversold situation and you shift additional funds to add to your stake. Otherwise, buy, hold, and repeat until you have met your goals and needs.

exilion
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Picking companies in totally differentiated industries not only mitigates your risk to a higher degree, but in turn puts a drag on your portfolio's performance.

===============================================

Isn't that what the Standard and Poor's 500 index does? It is an index with stocks covering all industries in the economy. It is looked upon favorably by the Motley Fools.

What are your views on the S&P index funds?

a07843
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My view is... you can pick stocks that will do better than the S&P index funds. It's easy to do and you'll be rich rich rich.
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Hi Jen,

No experience in the three you listed. But, if you are looking in the banking area of DSP/DRP's, you might want to consider these five:

Fleet Boston (FBF) - 1 share to start; $10 min.; FEE-FREE
Bank One (ONE) - 1 share to start; $25 min.; FEE-FREE
Comerica Bank (CMA) - 1 share to start; $10 min.; FEE-FREE
Wachovia (WB) - 1 share to start; $20 min.; FEE-FREE
SunTrust (STI) - 1 share to start; $10 min.; FEE-FREE

I look for no-fees and low-minimums first. (Of course, there are other reasons...) In essense, do YOUR OWN Due-Diligence.) Here is a link to a site that I often use as a reference:

http://www.directinvesting.com/moneypaper/companies/nofeeco.cfm

(Disclosure: I have been happy with FBF's DRP thus far LTBH.)
Good luck!
CHawk





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No. of Recommendations: 13
What are your views on the S&P index funds?

a07843
======

a07843,
I think if a person has no inclination to research and most important, be responsible for their personal finance, the least they could do is set aside contributions to an index fund. Maybe even a broader index fund, but I wouldn't. I would almost rather that person buy SPiDers (SPY) instead for better liquidity, and in some cases, I believe better tax efficiency. (Not my general area of interest though.)

As for the drag on performance, it is true. In the tech run up last year, the Nasdaq 100 soundly beat the S&P 500. Short run, as a spectator, it doesn't matter at all. Diversification means owning all the winners and all the losers and all those in the middle. Not bad, in the end that has still historically produced a better return than many other classes of investments.

I am not here to disrespect you. I am only providing my answer in the context of the question as I understood it.

exilion
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No. of Recommendations: 3
CHawk,

Wachovia (WB) - 1 share to start; $20 min.; FEE-FREE

Note that Wachovia is being taken over by First Union (FTU), which will later change its name to Wachovia. The plan that's likely to survive is First Union's, which is also fee-free, but requires 10 shares.

dave fish/moneypaper
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No. of Recommendations: 2
I've got a lot of respect for Index Funds. When one begins to look at the statistics, you just have no choice in this regard.

Burton Malkiel (Princton University economics professor) selected the 20 equity funds with the highest returns from 1990 through 1994. He then looked at the performance of these funds the ensuing five years and found that they fell to the middle of the pack (the #1 fund in 1990-94 ranked 129th in 1995-99, #2 fund ranked 134th, #3 fund ranked 261st, etc.). Similar results were found in other periods.

I believe that we can have excellent success in the short term, but going out many years makes for considerable difficulty. Funny, how we may pride ourselves for beating the Market, when it really reflects the average of the whole, so it is a big deal to get a grade better than a "C".

Of course, this doesn't mean that one shouldn't try - I certainly am. However, I also participate in investing in my S&P 500 Index Fund as a major part of my investing schema. This is what helps mitigate risk, and at least I know that I'll come very close to matching the Market.

Cheers -

george
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I just started a drip with WM. Their transfer agent -- melloninvestor.com -- seems pretty good. I haven't received my certificate yet but I can already access my information from their site, and even schedule OCPs.
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Thanks for the info, dfish. Maybe Wachovia isn't such a great choice?!

Have a great day,
CHawk
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CHawk,

Maybe Wachovia isn't such a great choice?!
It's not that it's a bad choice, just that it's more of a "not applicable" since it's being taken over. Now, you'd be considering the "new" Wachovia, which will be the combined First Union/Wachovia and, as with all large mergers, the jury is still out on its attractiveness.

Another bank to consider is BB&T Corp. (BBT), which is also based in North Carolina, and has grown through a steady stream of acquisitions into a large regional bank. It has a very friendly, self-administered DRIP that allows OCPs by check or autodebit as small as $25 per month. (I invest through such autodebits in BBT.) Other good Southeast banks include SunTrust (STI) and AmSouth Bancorp (ASO).

dave fish/moneypaper
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