DRiP Dividends

Physician's Money Digest, September15 2003, Volume 10, Issue 17

Tip:

Direct Reinvestment Plans (DRiPs)are an investment that's getting a boostfrom the new lower tax on dividendincome. With many companies raisingdividend payouts (183 companies inJuly of 2003 compared with 100 in Julyof 2001), DRiPs are looking better toboth novice and sophisticated investors.With a DRiP, dividends are automaticallyreinvested in more stock. MostDRiPs also let you buy more companystock, often as little as fractions of ashare, for a single transaction fee. Watch out for fees. If you invest smallamounts frequently, your transactioncosts can wipe out any gains. Long-terminvestors should also be wary. Theimproved tax treatment of dividends isset to expire within a few years unlessCongress extends it, which is not a surebet. For more information on DRiPs,check out Netstockdirect.com onlineor call 888-638-7865.