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The Pocket Idiot's Guide™ To Direct Stock Investing by Lita Epstein, Douglas Gerlach

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DRIP Advantages

As you look at DRIPs, consider what types of advantages you’ll need. You can find details in the prospectus. Here are some key features you want to look for:
• You should not have to pay brokerage fees to buy additional shares. You may have to pay a processing fee for additional cash purchases, but make sure these fees are lower than what you would pay a discount broker.
• You should be able to reinvest dividends easily and automatically.
• You should be able to buy fractions of shares. That’s a big advantage of a DRIP over a brokerage house. With a brokerage house, the least you can buy is one share, so often your money sits in a money market account until you have enough money to buy a share. With a DRIP you can buy a fraction ...

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