One of the best strategies — and one
of the easiest ways — to build your stock and mutual fund
accounts is to reinvest your earnings from these investments.
Reinvesting lets you take advantage of the power of
compounding.
That means your earnings are added to your principal to create
a new base, which may generate future earnings. In a strong market,
compounding produces what is sometimes described as a snowball
effect.
Two popular ways to reinvest are to participate
in a dividend reinvestment plan (DRIP) for individual stocks and
reinvest the distributions you receive from mutual funds.
Gail Dudack,
Managing Director,
Dudack Research Group
Gail Dudack, 
