[Question about auto-dividend reinvestment]

Thanks for clarifying!

 

I am with Schwab as well and I use a software called Sharesight, which tracks Dividend Reinvestment Plans (DRP). After going through the cost basis for the DRP in Schwab, I've noticed that they are pretty much higher than if I had purchased shares that day on the open market. Can anyone share why? Very tempted to just let the money accumulate in my brokerage account and buy on the open market instead. Although DRP is convenient, I feel like I've been ripped off.

 

Auto dividend reinvestment is a bad deal for you because the shares being purchased for you are usually being issued at the same time...it's a good deal for other shareholders tough.

 

It's a better option to purchase shares from the open market because no shares get issued.

 

Beerbaron

 

I don’t understand your comment. How does issuance impact the pricing?

 

Attached is a little scenario comparison to explain. Hope it clarifies the logic.

 

BeerBaron

[The Intelligent Investor: Revised Edition (Kindle eBook) $3]

I've just finished reading it on my Kindle Oasis. I dislike how the footnotes are at the end of the chapter or end of the book, making it not readily accessible. Tempted to buy the hard copy instead. What's the best version?

[Outstanding Investor Digest]

The website seems down. Is it possible to access previous editions of Outstanding Investor Digest?