Advantages of a Synthetic DRIP
While synthetic DRIPs can delay the building of a portfolio in a specific stock, they do have benefits:
• They allow you to determine the stocks into which you want to invest your extra cash from dividends. You could use the cash to buy stock in a company that didn’t pay you the dividends.
• They allow you to manage a portfolio of a number of stocks from one brokerage account.
• They provide free access to the analyst reports offered by the brokerage house.
• They provide you with consolidated monthly statements.
Let’s take a closer look at what these advantages mean to you as a synthetic DRIP investor.
Pick Stocks for Investment
Since the broker may only allow you to buy whole shares and not fractional shares ...