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Sunday, July 12, 2009

An Insight Into Drip Investment

By Mr Christopher Latter

drip investment is very profitable mode of investment. Drips are usually chosen by the ingenuous investors. It would not be good to choose drips if you are a beginner and investing for the first time. The reason behind this is you would not need the diversification. It would not be very wise for the original investors to opt for individual stocks.

Timing is the most important thing in the stock investment. This also applies to drip investment as well. Time never depends on acquiring the required basic information of the company. It never depends on the computer tools, investment devices that help you in choosing stocks. Time is independent of the N Y S E (New York Stock Exchange) i.e. it does not depend on the obtaining the seat in the exchange to discuss various strategies and plots.

Dividend Reinvestment plan generally called as Drip investment is provided by many companies where you can buy the stocks of that respective company by taking the help of an elective agent rather than a mediator, broker or a consultant. There is another concept called pseudo drip. Some companies do not favor drips. Some mediators give this opportunity to have a virtual drip i.e. a part of the stock with very little price. Both are same in the context of reinvesting the returns earned. You don't need to pay any extra charge for this.

Cost standardizing is the main idea which makes Drip investment powerful. This plan is all about creating many users over a time period. There would be a decrease in the risk due to this. This is the reason why more and more people are getting interested in drips. There is wrong feeling that these plans are perfect for everybody, this is not always right because there are certain limitations in it as well.

Even though there are many ways to work about each, the restrictions are needed to be implicit. Every drip investment plan has least purchase amounts. This does not mean that one is need to purchase every month, but when some buys are done, the sum should be as a minimum as the sum.

You should only look to buy drips only when they are at their lowest possible price. This increases your chances of getting high yields and in turn increases scope for high reinvestments. This is not easy as one might think as it requires good skill to determine what is the least buy of a drip in particular. It you buy drips at an over price you would not utilize your money to its true potential.

It would be very wise if you put a break on your spending. Do not use credit cards and stop leading a debt life. It would be good to save more money and invest in drips so that it can be utilized to earn cumulative profits over the years.

You don't need to spend too much to move your investment money. It is very less. Choose the companies that provide great option for their drips. The companies you choose should have great potential to grow big in the long term. Have a happy drip investment. - 23196

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