Ask Doug

I'm Going to Start Investing in DRIPs. How Do I Pick a Winner?

Q. I haven't started in DRIPs, but I am wondering how to pick a winner? Which industries have the best potential? Large companies vs. small companies, which have better results over long periods of time?

A. I think a portfolio of DRIPs will do best if it's diversified across a number of industries, and includes both large and small companies (though it's harder to find small companies with DRIPs). Building a long-term diversified portfolio is definitely better than trying to guess which "hot" sectors to buy into next week. With DRIPs, any attempt to "time the market" are usually blown out of the water because of the delays in purchasing shares.

I suggest that you take a look at my StockCentral.com web site, which includes solid tools for finding and picking long-term growth stocks.