Setting your limits.Q When you get to 100 shares in a company, should the automatic deposit be stopped? And is it better to put $1,000 in a company and let it ride or continue to make automatic deposits? --W. Amaker Columbia, South Carolina Columbia is the state capital and largest city of South Carolina. As of 2006, estimates for the population of the city proper is 122,819[1]. Columbia is the county seat of Richland County, but a small portion of the city extends into Lexington County. A This is a common quandary investors face when they own individual stocks through a dividend reinvestment plan Dividend Reinvestment Plan (DRP) Plan which provides for automatic reinvestment of shareholder dividends in more shares of a company's stock, often without commissions. Some plans provide for the purchase of additional shares at a discount to market price. (DRIP) or direct stock purchase plan (DSP (1) (Digital Signal Processor) A special-purpose CPU used for digital signal processing applications (see definition #2 below). It provides ultra-fast instruction sequences, such as shift and add, and multiply and add, which are commonly used in math-intensive ). First, identify what your investment objectives are. If you're plowing money into securities to meet a specific goal like retirement, you should have as diversified a portfolio as possible to protect yourself against market volatility. For investors of modest means, it's easier to reach the $1,000 milestone. This lets you invest in a larger basket of stocks in a shorter period of time. Also, you can own $1,000 worth of AT&T (NYSE NYSE See: New York Stock Exchange : T)faster than 100 shares. For example, if AT&T stock were trading at $15 or $30 a share, it would cost $1,500 or $3,000, respectively, to purchase 100 shares, which is more than the $1,000 you originally budgeted for. But to reach 100 shares in, say, IBM (International Business Machines Corporation, Armonk, NY, www.ibm.com) The world's largest computer company. IBM's product lines include the S/390 mainframes (zSeries), AS/400 midrange business systems (iSeries), RS/6000 workstations and servers (pSeries), Intel-based servers (xSeries) Corp. (NYSE: IBM), be prepared to either shovel in more cash or to invest set amounts over a longer period of time. You will reach your goal faster if a stock split occurs, since you'll be getting more shares. Once you've reached your 100-share or $1,000 limit, reevaluate your portfolio and your goal. If owning, say, two dozen stocks in various industries will help you retire at a certain income level, fine. But if you need more cash, keep plowing the money in. The more you invest over time, the greater your returns. --I.C. Mail your finance questions to Ask B.E., Black Enterprise, 130 Fifth Ave., New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of , NY 10011, or send an e-mail to cintroni@blackenterprise.com |
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