Ask a Fool: Is Dividend Reinvestment Necessary Anymore?
I've personally written tons of content about the benefits of DRIP investing over the years, but I have to say that it's starting to become a bit less appealing.
If you aren't familiar, a dividend reinvestment plan (DRIP) takes the dividends that you get paid by the stocks you own and reinvests it back into additional shares. And there have been three main benefits to doing this as opposed to simply buying more shares yourself when dividends are paid:
Well, now that virtually all major online brokers have eliminated commissions, and some are starting to introduce fractional share trading, two of these benefits seem to be going away. If I get a $50 dividend from a stock that trades for $100 per share, I can now use that $50 on my own and purchase 0.5 additional shares.
Source Fool.com
