Hey Lynn,

 

It's been a while since we communicated. I had a feeling the answer to my question would result in exactly what your response would be. Thanks much for your experience.

 

Bill 

 

Hi Bill, 
 
I spend many years doing DRIPs. But it got to the point where many companies couldn't afford the thousands of little investors, so most have made their plans very unattractive. For instance, it was cheaper to use my deep discount broker than to buy Home Depot stock direct! 
 
DRIPs have several drawbacks. (1) Enrollment fees, as high as $15-$25. (2) The Optional Cash Payment fees (OCP) which can run as high as $5-$8 plus several cents per share for every investment you make. (3) Delayed investment which could push the price out of your range by the time the money is spent. (4) It takes several days to several weeks to find out how your cash was invested. (5) Selling and exit fees. (6) For clubs, try getting your account closed! If you don't have a medallion signature, it's like pulling teeth! Oh yes, and (7) there's a lot more paperwork. 
 
I use www.firstrade.com and I pay $6.95 for all trades--market, limits and stops. I still send money every month (part of my billing payment process) but I'm careful to invest it in increments of $300 or more to keep my tradings costs in the 2% range. Plus. I like ONE monthly statement which comes via email. 
 
DRIPs are still viable for some people. But times have changed. Online brokers have evened the playing field, allowing small investors the same conveniences as the big guys. 
 
Lynn Ostrem, President 
garbagecop@earthlink,net 
Crow River Investment Club 
www.bivio.com/crowriver 
 
> Does anyone have an opinion on investing directly with these 
> companies without the fees of online traders or is the 
> control better with buying and selling through the online 
> traders? 
 

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