DRIPs are an encouragement for investors to increase their personal wealth and effectively earn more profit by investing in their own profit. DRIPs are plans (without) commissions and fees which is more reliable when compared to mutual funds and speculative trading. DRIPs allow investors to buy shares at a discount frequently. Dollar Cost Averaging and Buy Hold strategies can benefit from DRIP investment for higher long term profit.
Why invest in DRIPsDRIPs are setup by large companies in the share market and grant discounts on the shares bought through this method of reinvesting; this is more advantageous in comparison to market traders and mutual fund investors when taking a “deep rooted” approach. The speculative trading pattern may be a hit or miss game, predicting the success or failure of the game. DRIP investment is speculatively better than the traditional buying and selling of shares when risk is taken into consideration.