The Fribble
Tuesday, November 16, 1999

I'd Rather Fight Than Switch

By theRambler

Just like that old TV commercial for Benson & Hedges, I'd rather fight than switch. (I know, I know... I am showing my age by merely remembering TV commercials for cigarette companies.) I love my full service broker. Not just full service, but big-name, full commission -- all that good stuff. Why not? I do not trade stocks -- I purchase stocks. I buy them, just like a bag of dog food or a pair of shoes. Once I have bought them, they are mine. I hold all my stock certificates in my hot little hands, not in some stuffy brokerage account somewhere. Hey, I'm the one who paid for them, they're mine. They sold them to me, so I took them home.

My broker, who really does qualify as a Fool like us (not to be confused with a fool), was the one who told me all about dividend reinvestment a long, long, long time ago... 1981, to be exact. While it seems to be considered a new invention by some, it has been around for quite a while.

Being a young, poor waitress in those days, I started out by purchasing one (yes, count them, one) share at a time. As my broker pointed out, you only need one share to qualify for the dividend reinvestment plan. When I began dabbling in the market, the standard commission was hovering around the 10% mark. But if you bought one share and paid the commission, you could send in $10 occasionally and add to your holdings without adding any extra commission to your bill. (I avoid the plans with fees now, after getting stung badly in my early days. It really is possible to pay more in fees than you collect in dividends for those of us who are investing on a small scale.)

Small-scale investing qualifies more as an interesting hobby than any day trader will ever discover. How many day traders even care what picture is on their stock certificates? To keep us entertained, Mattel even updated the picture on their certificates. The new ones are even in color! Call them artwork and hang them in frames if you want to, but once you have bought them, consider them sold!

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