I admit that I sort of glossed over DRIPs initially, mostly because online brokers are more in my comfort zone given my limited trading experience, and at first glance I may have unfairly considered this approach unduly complex.
However, as a reader aptly commented on an earlier post, a good number of the companies on my watch list offer DRIP/SPP programs. Not only that, but as pointed out in a 2003 Money Saver article, a ‘core DRIP portfolio’ as recommended by Tom Connelly including a telecom, a pipeline, an electrical utility and a bank (he also includes Terasen) can all be acquired through DRIPs. Not only this, but at least for the pipeline, utility and bank, these also can be cross-listed with Mergent's Dividend Achievers list - Enbridge, Fortis/Emera, and pretty much all the banks, save RBC – respectively.
The other benefit I see personally with DRIPs/SPPs is that I can pretty much start investing immediately with even monthly contributions, without having to save up lump sums that end up competing with other household interests. Naturally, paying no commission fees has an obvious savings appeal.
With these considerations, my portfolio could be:
In fairness, I have run into a couple of challenges:
- Getting the first share – while I have had some interaction from the great group at DripInvesting.org (lots of information here as well) in trying to buy a single, this will take some time, unless I want to shell out large service fees to buy a share through my Waterhouse account and transfer into my name.
- Despite a wealth of good resources online, there still is a lot to figure out for a first-timer by culling from a number of sources (some of which are occasionally spotty and out of date). I may well craft a small series in the ‘DRIPs for Dummies’ vein once I get through my first transaction.