08-20-2014, 04:16 PM
(08-20-2014, 01:16 PM)EricL Wrote: Both Sharebuilder and Schwab offer free partial share reinvestment of dividends. I'm surprised to hear that there are brokers that require full shares be purchased.
I believe that is ScottTrade. I don't think they charge a commission on it but I don't have an account there.
For me, I'd rather just let the brokerage reinvest whatever I get back into the company. I'm not particularly worried about the price -- 10 years down the road I'm not so sure it will make a difference price-wise. The income change coming from it is noticeable even with a slow grower like T.
For someone starting out with a small account, like my wife, it would take a month or more to collect enough dividends that would cover 1 share of something like UTX or GWW. If we saved all the dividends, it may take almost a year to purchase another position of around $1000 to keep transaction costs low. So, we DRIP the conventional way.
I think you need to do what makes sense to you and your circumstances. Neither is a bad way.