Dividend Reinvestment Plans (DRIPs)

Many new investors look for a way to invest a small amount of cash into the stock market without paying huge commissions. To meet this increasing demand, more companies are offering dividend reinvestment plans, also known as DRIPs. DRIPs are offered by a corporation and allow investors to reinvest their cash dividends by purchasing additional shares or fractional shares of some of the most well known publicly-traded companies for as little as $10 at a time. As a result, DRIPs have become heavily promoted as viable solutions to new investors entering the stock market