Best way to record a DRIP transaction in your folio

Friday, Jan 18 2019 by


I like using the folios to track my investments. Since migrating everything to Stockopedia, I have been having some dividend reinvestments take place. I was wondering the best way to record these in my folio. I have been adding them as a *BUY* transaction but this is not technically correct as it didn't cost me anything, so my cash position goes a bit more negative and I don't experience the overall return improvement.

How are other subscribers doing this? I hope I have been clear ...

Thanks, Jared.

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6 Posts on this Thread show/hide all

Furtim 18th Jan 1 of 6

Add them as a dividend.

When you select "add transaction", change the "type" box (which defaults to buy) to "dividend" instead. Then fill in the fields accordingly.

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jonesj 19th Jan 2 of 6

I stopped DRIP investments about 10 years ago to reduce complication and administration.
In an ISA or SIPP, this is merely helpful. In a taxed account, if prevents nightmare capital gains calculations.

The dividends from all stocks roll up for a while and I purchase something with a normal trade.

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gus 1065 19th Jan 3 of 6

FWIW, I used to record my DRIPs with a double entry. I’d record the dividend as income (as suggested by Furtim above) and then add a second item as a purchase of shares in the normal way for the price at which the shares were purchased via the DRIP. If you record costs you should add the DRIP fee (typically £1.50) as a “brokers commission”.

I used to use DRIPs wherever available (Charles Stanley used to offer it for all or no shares held with them) but stopped a couple of years ago as the sums were small, the costs prohibitive (especially for large denomination shares where I ended up with stubs of uninvested cash sitting in limbo) and the tax paperwork a headache. I now do as Jonesj outlines.


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Silver Moon 19th Jan 4 of 6

BT burned my fingers, I used DRIP right from privatisation, it was fine for a few years but as the share price rose those DRIP share became increasingly expensive. Then over time the share price went into reverse and left me much poorer. Having handed my paper certificates in and gone CREST I cannot for the life of me work out my Capital Loss. No more DRIPs in my house.

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jared007 19th Jan 5 of 6

Interesting points which I hadn't considered. I have read and take on board that I should be reinvesting dividends as a good long term strategy. However, there's nothing to say that the dividend has to be the same share - that's a new idea for me. All my trading is inside ISA/SIPP so I don't think there are the tax issues to worry about.

I like the idea of accumulating the cash, and taking another position when the timing is right which may be an entirely new holding. Until this post, I had been swayed by the £1 DRIP fee from ii as a cheap way to buy into more of the same share. I guess I have to weigh up the pros/cons of that.

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jonesj 20th Jan 6 of 6

1 The DRIP fee of £1 is probably more expensive than letting the money roll up & making a trade. If we assume a generous 5% yield, then to buy 100% of the holding costs £20. That is more than a dealing fee.   

 2 Not using DRIP also allows slow rebalancing.

I can see the sense in DRIP for anyone who had a small static portfolio of say 5 stocks or less paying a total of £250 per year in dividends and no new money being added.
For anything larger or any portfolio with new money added, I don't see the benefit of DRIP.

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