The pros and cons of a dividend reinvestment plan May 20th

The “Big Five” Canadian banks offer investment funds and include Royal Bank of Canada, Toronto Dominion Bank (TD Canada Trust), Bank of Nova Scotia, Bank of Montreal and Canadian Imperial Bank of Commerce (CIBC). Let’s explore the best place for you to invest.
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What type of insurance does a home-based business need? + MORE May 25th

Q. I am starting up a small business where I will manufacture, market and sell my own products online. I will use a room in my home as an office. What type of insurance do I need? –Paul A. Hi Paul. An insurance policy protects you against defined risks. Although I haven’t seen your home insuranc.... More »

India asks internet service providers to block WeTransfer - Jun 1st

India asks internet service providers to block WeTransfer  TheChronicleHerald.caIndia blocks File transfer service WeTransfer - here's what we know  TechradarWhy is WeTransfer banned in India: Know all about it  India TV NewsGovernment of India bans WeTransfer file shar.... More »

Does a spouse’s real estate ownership cancel out first-time homebuyer qualifications? Jun 5th

Q. My husband and I married recently, and we have lived together in a rental apartment since we got engaged and married. He has a condo, which he purchased seven years ago, but he has not lived there for the past three years. I’ve never lived in that condo and he didn’t use the Home Buyers’ Pl.... More »

Canada’s best Mastercard credit cards 2020 + MORE Jun 2nd

As one of the top credit card companies in the world, Mastercard is both extremely popular and also nearly universally accepted. For those already banking at BMO Bank of Montreal, a major Canadian bank that associates with Mastercard, these cards may offer all the perks you’re after, along with op.... More »

What to consider before transferring RRSP money to a company pension plan Jun 3rd

Q. A few years ago, I joined a public sector employer with a hybrid defined-benefit, minimum-guarantee pension plan that will allow me to move RRSP contributions made elsewhere, into the employer’s plan. I have been told that the transferred money would have to remain locked-in until I retire or l.... More »
Q. What are the pros and cons of using a DRIP  in an unregistered account?
A. Many stocks and exchange-traded funds offer a Dividend Reinvestment Plan, or DRIP, for investors. A dividend reinvestment plan does just what its name suggests: It reinvests dividends paid by a mutual fund, stock or ETF into more shares or units of that same mutual fund, stock or ETF.
If you have an investment advisor, they can determine which securities are DRIP-eligible. RBC Direct Investing provides a list of Canadian and U.S. stocks and ETFs that are DRIP-eligible, and that should apply for most do-it-yourself investors at other brokerages as well. Mutual funds generally reinvest all distributions into new units as a matter of course.
There are pros and cons to dividend reinvestment plans, Doug, as you suggest. Here are the top three reasons to DRIP and not to DRIP.
Reinvestment helps your money grow
The magic of compounding is one of the definite pros of dividend reinvestment. If you own $100 worth of a stock that grows at 4% per year and pays a 2% dividend, and you reinvest your dividends, you will have $179 after 10 years…

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