Ask HN: How do you invest?

Re:Ask HN: How do you invest? by PhantomGremlin on Saturday September 06, 2014 @09:04PM (#8280019)

Buying DRIP stock has a lot of tax complexity. You establish a new cost basis for stock with every dividend you receive. I.e. 4x a year.

   Above all, the importance of recordkeeping cannot be
   overstated. Unlike other tax-related documents, DRIP
   statements, recording all reinvestments and OCPs,
   should be kept indefinitely. [1]

But if you die and leave everything to your heirs, all is forgiven. They get a brand new tax basis and it no longer matters when you bought.

[1] https://finance.yahoo.com/education/drip/dspp_plans/article/...

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Re:Ask HN: How do you invest? by OGiR on Sunday September 07, 2014 @12:49AM (#8280381)

Thanks for the advice. It is important not to overlook the downsides of any investment strategy, and I do keep very diligent records.

The downside to DRiPs as you mentioned is the amount of paperwork you have to do and the difficulty in selling. For me, however, I am willing to incur that cost for the upsides which are particularly maximized by my personal situation.

I am not sure about how difficult US taxes are, but in Canada they are fairly straightforward for someone adept at math and logic.

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