Today's column is written by guest Fool Mark Mandabach, who can be found on the Drip message boards. If you would like to write a guest Drip Port column, please contact us!

BIRMINGHAM, AL (Oct. 22, 1999) -- As I began to learn about investing, I became enchanted with the world of dividend reinvestment plans (DRIPs) and direct stock purchase plans (DSPs). They provided a way to buy stock in great companies without setting up a brokerage account. I could get started with my small nest egg and contribute monthly. I used a Drip enrollment service to buy one share of three companies and then added a few other companies through DSPs.

Early in my investing experience, I read a column in The Motley Fool advising the novice to pick a few good companies and stick with them rather than buying into too many Drips. I did not do that! I just kept buying and buying until ultimately I was the proud owner of 11 plans. What a hassle it became! It took the fun out of investing. It took me away from another financial goal -- paying off my student loans more quickly. I had so many investments that even with my Quicken program I was not sure how my investments were performing. I realized I was making the same mistake that I made when I began my 403(b) plan at work.

In that plan, I began by following the advice of the Wise -- putting 25% in an international stock fund, 25% in a domestic stock fund, 25% in a money market fund, and 25% in a bond fund. I never really knew how my investments were performing and the accounting was a huge waste of time. I finally got Foolish and put everything in an index fund. (I have since moved a portion into a sector fund to take advantage of technology and Internet stocks, but keep most in the Russell 2000 index fund.) Now I do not have a lot of accounting to do and I do not have to think too much about these investments.

What to do with my Drips?

I agonized over this for a couple of months and decided that I would break down my investment list into buy, hold, and sell groups. I sold the three most recently purchased stocks (at a small loss) and sent that money in to pay down my student loans. I realized that I should have paid down the loan in the first place. I chose three stocks that are doing well and that I am still excited about and increased the amount of my monthly contribution to those accounts. I do all of my investing by direct debit from my checking account -- so I had a bunch of letters to write!

The others I am holding and will keep at least until the end of the year. At that time, I may sell and invest that money in my favorite three stocks, or I may hold for another six months to a year and then re-evaluate. I think that it is best to take a wait-and-see attitude and not sell based on emotions. Maybe the money would earn more if invested in another stock. Maybe not. However, to move the money, I might have to sell at a loss. Better not to get discouraged and emotional and dump the stock.

Remember that you have no control over the sale price if you sell through the Drip. On one plan that I sold, I saw a difference of $4 per share between the price at which the dividend was recorded and the price at which the sale was recorded. (Sale price $4 lower than dividend price.) The transactions were recorded about a week apart.

What have I learned from all this?

That may be the most important question. Remember, life is a learning process. I started out knowing so little about investing. I had the desire to invest, but no knowledge about how to invest. Now I have some knowledge about the process and have more realistic goals about what I can and cannot do right now. These are the "pearls" I would like to share with other Fools:

1) Keep your financial goals realistic. You can't invest more money in Drips without taking money away from other items on the budget.

2) Don't get hooked on buying every Drip you can. It can be a form of compulsive shopping. It is a hassle from an accounting standpoint and can take the fun out of investing. Buy into a few great companies and invest a decent amount each month. Put more money into a few plans rather than adding more plans and spreading your money, time, and emotions too thin.

3) It may be painful to sell because it may feel like you are giving up on your dream. Nevertheless, if it means bringing your goals back into focus and having a new plan, that can be worth a lot. Change is good.

4) Don't get too hung up on the fees charged by DRIPs and DSPs -- if you like a company and can afford to put in a reasonable amount of money, the fees should not significantly cut into your returns. If you can keep the fees to about what you pay in an index fund (0.20%), all the better.

5) If you want to sell, you may want to think about getting a stock certificate issued and selling your shares outside the plan.

6) Keep it fun!

P.S. Please note that on Monday, October 25, Drip Port will send $100 to invest in more Intel (Nasdaq: INTC).

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