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Non-Tech : DRIPs -- Dividend reinvestment plans
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From: Jacob S. Rosenberg1/15/1996 1:14:00 PM
   of 263
 
Bah, humbug!

Dividend Reinvestment Plans (DRPS) are no good. Here's why.

1) First, look at what you have done. You asked money managers what
stocks they like. Well, if you were in a good Mutual fund that
you selected out of Morningstar, Lipper or another reputable source,
you would get that advice by virtue of actually being in the fund!

2) The stocks they said they like aren't necessary always in favor.
IBM and AT&T were once Widows & Orphans stocks but no more. In
some sense AirTouch is related to AT&T, as it comes out of Pac Tel,
but you have not listed AT&T nor IBM yourself. ALL STOCKS are
intrinsically speculative and they have to be watched. ALWAYS!
With a Mutual fund a professional money manager will do the watching
for you.

3) You talked about diversification. Mutual funds provide
diversification free of charge.

4) Last but not least, with a DRP you might become mentally attached
to an investment you really should get rid of.

Invest in Mutual funds, not DRPs.

Fidelity Investments: 1-800-544-8888

Twentieth Century Funds: 1-800-345-2021
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