This is the main advantage of drip, which is cheap or email list not at all. That's why drip has become a popular investment tool for a variety of investors who can use the income and rupee cost averaging method in the form of dividends paid by the company. This not only guarantees the return of whatever dividend yield is, but also gives the investor whatever the stock values during the holding period. Types of drip performed internationally: currently in india, the method of reinvesting individual dividends at the individual's choice is part of the stock and is a defined strategy adopted by investment trusts.
However, the international market has such an advantage as it takes a systematic approach of reinvesting dividends, which is also worth reproducing in the domestic market. There are two types of drip, conventional drip and synthetic drip. Traditional drip: traditional drip is a company-provided plan managed by a transfer agent who can email list reinvest dividends and buy additional shares. Some companies also offe discounts on stock prices. However, this plan applies only to existing shareholders. It's difficult to register with a traditional drip, so most people only register if the company also offers a stock purchase plan (spp).
Spp allows you to purchase additional shares email list through a transfer agent and add them to drip. Synthetic drip: synthetic drip is a service provided by a broker. It depends on the broker, but most of them do not reinvest in odd lots. This means that you need to pay enough dividends from a single payment to cover the cost of your stock. Example: suppose you receive rs50 as a quarterly dividend, but the stock price is rs100. If drip allows fractional sharing (traditional drip), rs50 will be reinvested and half of the share (0.50) will be added to the account. If the drip does not allow odd shares (synthetic drip), rs50 is not enough to buy all the shares and will be deposited as cash in your account.