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Dividend Reinvestment Plan

A practice or agreement in which dividends on a security are used to buy more of the same security rather than be disbursed to the investor in cash. A dividend reinvestment plan is relatively common in mutual funds; investors agree to use dividends and other capital gains to reinvest in more shares of the mutual fund. While this involves assuming more risk in the mutual fund, it carries the possibility of higher returns.


Dividend reinvestment plan (DRIP).

Many publicly held companies allow shareholders to reinvest dividends in company stock or buy additional shares through dividend reinvestment plans, or DRIPs.

Enrolling in a DRIP enables you to build your investment gradually, taking advantage of dollar cost averaging and usually paying only a minimal transaction fee for each purchase.

Many DRIPs will also buy back shares at any time you want to sell, in most cases for a minimal sales charge.

One potential drawback of purchasing through a DRIP is that you accumulate shares at different prices over time, making it more difficult to determine your cost basis -- especially if you want to sell some of but not all your holdings.

References in periodicals archive ?
Just wash it down with the shower head then leave the curtain fully open to allow it to drip-dry.
More so, the true revolution is in the tested results that show that the tumble-dry suit has better crease resistance than its predecessor the regular machine washable suit, which was hung to drip-dry.
She had been married so often she bought a drip-dry wedding dress.
They manage to assemble a crease-free, drip-dry, capsule wardrobe just like women's magazines tell you to.
Obviously, she wasn't wearing the grey wig or the drip-dry dress, although her fashion sense is a bit dodgy at the best of times and someone really should talk to her about those plucked eyebrows.
They also were used to letting laundry drip-dry from their backyard fences.
On his return he established a lucrative business in Churchill Way, Cardiff, working as an agent for clothing manufacturer Rael Brook, the company that perfected the first drip-dry shirts.