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How To Start A Direct Stock Purchase & Dividend Reinvestment (DRIP) Portfolio

Updated on January 25, 2015
CliftonHRodriquez profile image

Clifton H. Rodriquez is a certified public accountant (CPA) by profession, but a passionate investment enthusiast.

Overcoming the FEAR of Getting Started

The best way to get started with direct stock purchase and dividend reinvestment is for the investor to overcome their FEAR of losing money, (FEAR is "False Evidence Appearing To Be Real" Gary Busey, Actor). The best way to overcome one's fear it to understand the dynamics of the US Stock Market. It is comprised of buyers and sellers. When the buyers out number the sellers, then the Market will probably increase, and when the number of sellers out numbers the number of buyers, then the Market will probably decline in value. Buying is generally accelerated by high expectation of stocks increasing in value, while selling is generally characterized by fear that stocks will decline due to certain conditions that influence investors' decision making. In a nutshell, "there is nothing to FEAR, but FEAR itself" (President FDR).

Now that the fear issue has been addressed, how does an investor start a DRIP portfolio. The following video accurately describes the process of investing via a DRIP portfolio. No need to reinvest the wheel. Listen intently to what he is saying. The step by step process will be outlined after the presentation.


Dividend Investing-creating a non-stop Passive Income

Buying Directly From Companies via Transfer Agents.

The most common transfer agent is ComnputerShare (www.computershare.com). This agent represents about 3,000 to 5,000 plus companies, and most of the major stocks (Walmart, Costco, IBM, BUD, Coca-Cola) can be bought through them. A potential investor can simply log onto their site, and go immediately to the "investment center". They can then Locate the symbol which shows a human hand putting money into a piggy bank. They should be able to click onto the symbol, and immediately they would be able to start the process.

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    • Mark Johann profile image

      Mark Johann 

      3 years ago from Italy

      Still difficult for me to understand the business on stocks but I will try harder to learn from you.

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