Vita Nelson is a leading expert in dividend reinvestment plans in which investors build long-term positions in stocks by reinvesting dividends into additional shares. Here, the editor of MoneyPaper looks at her latest featured DRIP idea.
When it comes to investing, most people focus on the overall stock market and short-term trends. They allow themselves to be most influenced by what the major indices have done lately and fret about forecasts for the economy over the next six months or year.
They become mesmerized by the bull-bear debates over what the Dow Jones Industrials or S&P 500 might do next week, or next quarter, and lose sight of any semblance of long-term horizons, let alone their specific stock holdings.
In doing so, they give up their greatest advantage, which is to own high-quality companies and let time work its wonders.
Our latest featured DRIP investment idea is Franklin Resources (BEN). Founded in 1947, and based in San Mateo, California, Franklin Resources is a publicly owned asset management firm that provides services to individuals, institutions, pension plans, trusts, and partnerships.
Best known for its Franklin Templeton funds, it manages client-focused equity, fixed income, and balanced portfolios, and launches equity, fixed income, and balanced mutual funds, as well as providing retirement plans.
With additional offices in the United Kingdom, Hong Kong, China, Australia, the Bahamas, and Canada, Franklin invests in the public equity and fixed income markets across the globe.
Consensus estimates call for BEN to earn about $3.73 per share in the fiscal year that ends in September and $4.07 in fiscal 2015, compared with $3.37 in fiscal 2013. The dividend has been increased for 34 consecutive years.
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