The Monthly Investment Plan (MIP) Continued

Under the Monthly Investment Plan, which operates on the principle of dollar averaging, you can invest as little as $40 every three months or as much as $999 every month or any amount in between. You merely send to your broker the sum you decide on, and he buys for you the stock you select. You pay only the standard commission any other investor pays. There are no fees, dues, assessments, interest charges, or other costs. You may miss a payment and your plan will still be in force; and you may terminate it at any time without penalty.

Critics of the Plan object to the fact that the purchaser will pay a somewhat higher commission when buying a share at a time, or perhaps a very few shares. This is, of course, true; but whenever anything is bought on pay-spreading arrangement it always costs more, whether it be a piano, a new automobile, a suit of clothes, or even a share of stock!

Many say that they are willing to pay the slightly higher commission because of the convenience of the "pay-as-you-go" feature of the Plan; besides, many state that they are buying for future capital gains, rather than just income, so that they expect the long-term increase in value to offset the commission charges.

The Monthly Investment Plan also has another advantage. It makes it possible for the investor to buy parts of shares, just as a modern gasoline pump allows you to buy fractional gallons when you drive up to a service station and simply ask for "three dollars' worth."

Fractional shares of stock are always figured to the fourth decimal place. Dividends are figured the same way. It is surprising how rapidly these fractions add up to whole shares. Finally, under MIP, dividends can be automatically reinvested, and this means that your total investment grows more rapidly.