Dividend Reinvestment Plans (DRIPs)

Dividend Reinvestment Plans (DRIPs) allow investors to automatically use the dividends earned from their stock investments to purchase additional shares of the same company, often without paying additional fees or commissions. This enables the investments to grow more steadily over time through compounding, as dividends are continually reinvested rather than received as cash. DRIPs are a convenient way for investors to increase their holdings gradually, often with lower costs and less effort than manually buying shares. They are commonly offered by companies directly or through brokerage firms, making them a popular tool for long-term wealth building.