Investors who apply the DRIP method to monthly dividend stocks create a win-win situation that can rapidly grow one’s capital. DRIP is simply an acronym standing for dividend reinvestment plan.
Those using the plan reinvest the dividends received to purchase additional shares of the stock. The result is a sort of virtuous cycle in which more and more shares can be accumulated. The plan works for dividends paid on any schedule but is particularly efficacious for monthly stocks given the additional reinvestment periods.
Continual reinvestment on an accelerated monthly schedule creates a snowball effect over time that most investors can appreciate. That simple truth has made and will continue to make the DRIP method an attractive investment strategy.
This post appeared at Dividend Stocks Research.