I am considering ask my Investment club to purchase DRIPS.
How can you track DRIPS? We use AccountSync which is linked
to our brokage account but how do you track DRIPS using
Bivio and how do you enter dividends that gets re-invested?

Wesley Taylor, Jr. writes:
> I am considering ask my Investment club to purchase DRIPS.

We tend to encourage clubs to not invest in DRPs. A DRP is like
automatic investing: it eliminates the decision process you should
make with every penny of your hard earned dollars.

Here's a longer explanation:

http://www.bivio.com/trez_talk/mail-msg?t=13913300003

> How can you track DRIPS? We use AccountSync which is linked
> to our brokage account but how do you track DRIPS using
> Bivio and how do you enter dividends that gets re-invested?

If you are using AccountSync, DRPs in your brokerage account are
automatic. If you are not using AccountSync, you will have to enter
them by hand using our Reinvest form.

Cheers,
Rob

Ah yes...Drips!

In my last club, we tried to stay with Drips because of the reduced cost of
buying them. We got used to the fact that we never knew (sometimes for a
month!) how much stock we bought. The treasurer got used to having to use
Suspense accounting, and never having the Valuation Statement up-to-date.
No matter. They were cheap.

Then things changed. Deep discount brokers dropped their fees and Drip
plans raised theirs. For example, Home Depot began charging $15 to start a
Drip. Each OCP (Optional Cash Payment) cost us $5, plus 8 cents per share.
And it was another $15 plus 8 cents to get out of it.

It's been two years and I'm in a new club that hasn't used Drips
yet--although we decided from the onset that they were a viable option. We
use www.firstrade.com as our broker. The trades are $6.95 for market
orders. I'm trying to keep my club from making too many purchases where the
trading costs exceed 2% of the total transaction. That means, at $6.95, we
need to make a trade of at least $300 to keep our trading costs at or below
2%.

The Drips aren't cheap anymore. Some of them are more expensive than
regular broker costs! A $100 OCP in Home Depot would mean a 5% trading
cost. Gee! How long would it take to make THAT up!

Two months ago, we only had $200 to spend, and my club members were just
itching to buy Copart! So that's what we did. It's all a matter of
collective decision-making. The trade cost more than 2% (3.47% to be
exact!), but that was trade-off they wanted to make to own the stock.

What's best? I think it depends on the Drip. But from what I've seen, the
education and the ease of bookkeeping (not to mention getting out in a
timely manner!) lends itself toward NOT using Drips anymore.

If you're going to present the use of Drips to your club, make sure you give
them the positives AND the negatives.

Lynn Ostrem, Vice President
Crow River Investment Club
www.bivio.com/crowriver

Wesley Taylor, Jr. wrote:
> I am considering ask my Investment club to purchase DRIPS.
> How can you track DRIPS? We use AccountSync which is linked
> to our brokage account but how do you track DRIPS using
> Bivio and how do you enter dividends that gets re-invested?

We invest $100 a month of our dues in Buy and Hold brokerage
DRIPS, while the rest of the dues go toward researched
stocks. Our goal is to have at least a 6% return through
dividends. Our DRIPs all pay a high dividend yield (PMC
Corp, for example, has a yield sitting on almost 20%).
There is no place else that you will get that kind of return
now.
We also chose TE (Teco Energy), Six Continents hotels, and a
REIT (Duke Realty).

The advantage of Buy and Hold DRPs is - no fee! However,
the brokerage does charge a monthly "account maintenance"
fee, which includes your first two trades.

Wesley Taylor, Jr. wrote:
> I am considering ask my Investment club to purchase DRIPS.
> How can you track DRIPS? We use AccountSync which is linked
> to our brokage account but how do you track DRIPS using
> Bivio and how do you enter dividends that gets re-invested?

We invest $100 a month of our dues in Buy and Hold brokerage
DRIPS, while the rest of the dues go toward researched
stocks. Our goal is to have at least a 6% return through
dividends. Our DRIPs all pay a high dividend yield (PMC
Corp, for example, has a yield sitting on almost 20%).
There is no place else that you will get that kind of return
now.
We also chose TE (Teco Energy), Six Continents hotels, and a
REIT (Duke Realty).

The advantage of Buy and Hold DRPs is - no fee! However,
the brokerage does charge a monthly "account maintenance"
fee, which includes your first two trades.