slide

 DRIP is an arrangement offered by companies to shareholders whereby dividends are automatically reinvested into additional shares of the company's stock. 

DRIP is a great way for investors to build their portfolio without having to pay commissions or brokerage fees. 

It allows them to purchase additional shares of stock at a discounted rate and then reinvest those dividends into more shares. 

This process creates a compounding effect that can result in significant long-term gains over time.

DRIPs can lead to dilution of shares, as the issuing company will issue more shares to shareholders, leading to a decrease in ownership stake.

It requires a longer investment horizon as shareholders may not receive additional shares until the dividend is paid at the end of the year or semi-annually.

Investors have no control over the share price as they are automatically bought and investors may end up investing when the stock is overvalued.

The decision to invest in a DRIP should be based on an individual’s personal financial goals and risk tolerance.

Click here to know more about dividend reinvestment plan

Check here for more personal finance related stories.

Investing in dividend reinvestment plan? Here are benefits and drawbacks

A dividend reinvestment plan (DRIP) is a convenient way to increase ownership in a company without paying fees; however, there are drawbacks like dilution of shares and lack of diversification that should be taken into account.

LIC, EPFO could be told to invest 1% of AUM in green bonds: Report

No proposal to increase overseas investment limits for Mutual Funds: Reserve Bank Governor Shaktikanta Das

Budget 2023: Is senior citizens’ savings scheme now large enough to meet financial goals of elderly?

Retirement Planning: From inflation to eventfulness, numerous aspects of life that manifest in your golden years

NFO Alert: Mirae Asset launches Gold ETF. Should you invest?

NFO Alert: Axis MF launches Axis Business Cycles Fund; all you need to know

RBI Policy: Banks to levy penal charge, not interest, in case of loan default; all you need to know

Ahead of G20, RBI enables UPI access for inbound travellers; here's all you need to know

MF central: Manage accounts with multiple fund houses at one unified platform; Here's how

Holding a number of mutual funds in a number of AMCs is not uncommon. It is, therefore, vital to manage all accounts with ease and comfort

Stock Check: JSW Infra jumps almost 100% from IPO price in 5 months; should you still buy?

Currently trading at around  <span class='webrupee'>₹</span>236, the newly listed JSW Infra has surged almost 100 percent jump from its IPO price of  <span class='webrupee'>₹</span>119 in less than 5 months. Technical and fundamental experts suggest if you should still buy the infra stock.

Axis Mobile App ranks top position on NPS leaderboard

According to a survey, Consumer awareness was most notable for payment platforms such as Paytm, Google Pay, and PhonePe. However, when it comes to Net Promoter Score, Axis Mobile App claims the top position with a score of 59, followed by ICICI Bank's iMobile Pay, and then BHIM.

Weekend Wrap: From Trent to Adani Power, top news and market movers this week: 27 October 2023

The stock market cycle is always a few months ahead of the economic cycle.

From top news makers to market performance, here's the market wrap for the week ended 27 October 2023.

Why rebalancing a portfolio provides a safety net against volatility?

Investing isn't a 'set it and forget it' game.

Rebalancing a portfolio provides a safety net by helping control volatility and minimizing the impact of market downturns, even though it may not always yield higher returns compared to an unbalanced, equity-heavy approach

Investing in dividend reinvestment plan? Here are benefits and drawbacks

A dividend reinvestment plan (DRIP) is a convenient way to increase ownership in a company without paying fees; however, there are drawbacks like dilution of shares and lack of diversification that should be taken into account.

Topics to follow