Bondholders Could Use Dividend Reinvestment, Too
Your article "Buying stocks like clockwork" (Personal Business, Jan. 16) describes some innovative ways investors can make periodic, automatic investments in stocks or mutual-fund shares. For common shareholders, especially of the long-term variety, dividend reinvestment plans, inelegantly called DRIPs, provide an easy, low-cost way to buy more shares, dollar average, and save, rather than spend, their dividends.
For issuers, DRIPs provide low-cost equity capital and increased shareholder "commitment." Since DRIPs do these wonderful things, why not expand their benefits to the too-often-forgotten investor--the bondholder? Why doesn't some bold company give its bondholders the ability to invest their interest payment in its shares? Let's have D/IRIPs--Dividend/Interest Reinvestment Plans.
William T. Dolan