Intel Corporation (INTC) Message Board

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Technology Stocks : Intel Corporation (INTC)

INTC 50.59

+4.9%

Feb 6 9:30 AM EST

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To: Ibexx who wrote (4888)	11/7/1996 2:20:00 PM
From: Andrew Chow	of 186894

>Problem with all DRIP programs is that you can't control the timing... I disagree although I also avoid DRIP's. Your typical retail investor is better off NOT trying to time the market. The forced cost averaging that results from a DRIP is actually a good thing for most retail investors. The problem with DRIP's is that you get a totally whacked tax basis. If you ever make a partial sale of your holdings in the stock your average retail investor is going to be way over his head when trying to calculate his basis. Most likely he will be retreat to using an average cost basis (if he can even calculate that), which fails to take advantage of his true tax status, ie. you might as well write a bigger check to Uncle Sam. With the increasingly low transaction (brokerage) costs to the retail investor, the net benefits from a DRIP are too low for most. The only exception would be a DRIP that subsidizes the reinvestment, ie. your dividends buy stock at a discount to market price.

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