Stock Market

Most corporations offer a handy service known as a Dividend Reinvestment Program, or DRIP for short. DRIPs are the best way for you to build a position in a company at a very low cost over a long period of time. Advantages of these programs include:

In most cases, there is little or no fee for shares purchased through a DRIP. This lowers your cost basis and can increase your returns substantially over long periods of time.

You can purchase additional shares of stock directly by sending in a check or having funds withdrawn from your checking/savings account. Most of the time, additional investments can be as small as $10 or $25.

You can establish automatic, regular withdrawals from your bank account to purchase shares. This is an easy way to establish a dollar cost averaging program.

Fractional shares can be purchased. Say you receive $15 in dividends yet the current stock price is $50. Through a DRIP program, you will actually be able to purchase 0.3 shares. This isn't possible through a broker.

Want to know how to get started? First, check and see if the stock you fancy offers a DRIP. You can either find the phone number for the investor relations department