I searched for this because I remembered reading an older thread from a search done months ago, but that thread must have been erased during a major crash (the server here, not the stock market)!
A DRiP or DRP means "dividend reinvestment plan." It's a method of purchashing common stock a small portion at a time. You can sometimes purchase only one share of stock and then purchase more stock each month, a little at a time. Sometimes this can be as low as $25.00 a month. Maybe even $10.00 a month, but the $10.00 per month programs will be few and far between. There usually isn't any requirement to purchase anything on a monthly basis, but if you add $25/50/100 per month, you'll be doing what is known as "Dollar Cost Averaging." It just means you'll be purchasing stock at a higher price some months and at a lower price other months. It helps in slightly reducing your risk.
While a mutual fund will provide much more effective diversification, purchasing one corporation's common stock via a DRP can help you "get your feet wet" in learning about the stock market if you've not invested in it before. Each quarter, the dividends you will earn from the stock will usually be used to purchase more common stock, along with any additional payments you choose to make each month.
Hmmm...I'm not doing such a great job of explaining this here, so I'll defer to Melonie, Monty and others to explain more fully. But to continue, there are several companies, such as Procter & Gamble, where you can establish a program in your name directly with the company with an initial investment of $250.00 minimum. I will also post three links I know of where you can purchase a first share of stock in order to establish a dividend reinvestment program. I do not remember the exact subscription rates and DRP setup fees for these three programs offhand.
The newsletter, The Moneypaper, which usually has several financial articles each issue
http://www.themoneypaper.com
First Share
http://www.firstshare.org
and BetterInvesting(formerly the NAIC or National Association for Invertors Corporation). This is more for investment clubs, but the last I heard, they allow individuals to join and use their stock purchase program too.
http://www.better-investing.org
Now, whether any given company is a good investment is open to debate, and once again I'll defer to others here regarding the desirability of common stock investments.
However, I highly recommend purchasing at least one common stock via such a program, where you don't have to risk a lot of your money, but can have a good learning experience as to how the stock market functions, and see if you might want to either invest more or completely avoid the stock market in the future. Depending on your outlook, you might expect another 1929, although there are constraints in place now in an attempt to prevent that from ever happening again. And your own outlook might be very "bullish" instead of "bearish"-anyway, have fun if you do decide to "get your feet wet" in the market.



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