NEW YORK, June 26, 2018 /PRNewswire/ -- Using a Dividend Reinvestment Plan (DRIP) is an easy way to build a wealth management portfolio, especially for long-term investors. Firstrade, the online brokerage, makes it even easier. Firstrade customers can sign up for free and automatically accumulate additional shares every time they receive a dividend from a particular stock or multiple stocks.
Customers not only can profit from the growth of the stock, but also reap the benefits of compounding returns. All without having to place an order or worry about commissions—it's an automatic and seamless process for investors. Here's how it works:
When you receive dividends from a stock in your portfolio, Firstrade will automatically purchase additional shares of the stock using the dividend amount. For example, if stock XYZ was trading at $10 a share and you receive $25 in dividends, 2.5 shares of XYZ will be added to your positions.
Over the long haul, financial experts cite participating in a DRIP as a great way to increase the value of an initial investment by allowing the compounding returns to do much of the work. Investors can use a DRIP for most stocks and ETFs offered by Firstrade.
Firstrade customers now have even more reasons to consider adding a DRIP to their portfolios. Recently, Firstrade offered more than 700 commission-free ETFs, the majority of which are highly rated by Morningstar.
"Firstrade's Dividend Reinvestment Plan is yet another example of our ongoing commitment to providing the widest array of products and services to our valued customers," said John Liu, Firstrade's founder and chief executive officer. "By accumulating additional shares and simply reinvesting them, our plan is particularly appealing to the long-term investor. As we like to say, it's wealth management at no cost, the investment foundation we're building on every day at Firstrade."
Learn about Firstrade's DRIP and other investment products at https://www.firstrade.com/trading