Dividend Reinvestment Plans (DRIP)
 

Here is the website:

http://www.dripadvice.com/

Questions:

1) Is this a scam?
2) If not, any members have experience investing in DRIP?
3) What are the pros and cons? compare to stocks,mutual funds

it's not a scam.

you buy a stock that pays dividends. DRIP let's you reinvest those dividends into more stock usually w/o commisions

something like this explains better than I can:
http://www.claymoreinvestments.ca/en.../etf-drip/drip

A good thing about DRIP is having tax deferred gains. Also, I think your "dividends" won't be taxed as dividends. Instead, when you sell, you will realize a greater gain as your ACB is unchanged but your POD is higher due to the extra shares.

A negative thing about DRIP is it buys at market price, therefore you can't time your entry point. To me, this is outweighs the tax advantage. Also, if you are in a lower income bracket, you barely pay any tax on dividend income.

Bumping a really old thread.

Wanted to see if any RSers buy or own any DRIP shares. I'm looking to get started in DRIPs and wanted to acquire one share in either:

-Scotiabank
-TELUS
-Enbridge

Figured it would be cheaper to acquire through private transfer rather than through a broker.