– A Dividend Reinvestment Plan (DRIP) allows investors to automatically reinvest dividends into more shares. – Helps in compounding growth without additional investment.
Why Choose a DRIP?
– Compounding Power – Reinvested dividends buy more shares. – Cost Efficiency – Avoids brokerage fees in some cases. – Passive Wealth Building – Works automatically over time.
How Does a DRIP Work?
1. Company pays out dividends to shareholders. 2. Instead of cash, dividends buy more shares of the same stock. 3. Over time, holdings grow exponentially through compounding.
Key Benefits & Risks of DRIPs
Compounds wealth without extra effort. Ideal for long-term investors who want steady growth. No immediate cash flow – Not suitable for income-seeking investors..
Investment Insights
– Look for Companies Expanding Fiber Networks: Telecoms with a strong broadband presence will see sustained growth. Monitor Subscriber Growth & ARPU: Higher broadband adoption leads to steady revenue