For much of the time since mid-1993, it has traded in the middle 20s. Investors should take this into account. The club also asks how dividends should factor into their decision whether to buy, hold or sell a stock, especially considering the opportunity for a dividend reinvestment program. As clubs or individual investors see their portfolio expand, dividends become a more significant source of funds compared to monthly investments by members. Yes, take dividends into consideration, but also remember that the company that earns a high rate of return on retained equity may be able to make more profitable use of dividends than the investor.
Commissions are frequently nil or very low.
Also, some brokers will not facilitate a dividend reinvestment plan when the stock is held in street form. Purchased through the Low Cost Plan , this is not a problem. Ralph Seger is president of Seger-Elvekrog, Inc., Birmingham, Michigan, president of NAIC's Investor Advisory Service and a member of Better Investing's Securities Review Committee. Club and personal portfolios may be submitted for review in the Better Investing magazine Repair Shop column. The basis for portfolio selection depends upon whether the information submitted is suitable to prepare an article of general interest that is useful to readers.