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BUY STOCK DIRECT
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GIVE KIDS THE
GIFT OF LEARNING!
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"Always sell what shows you a loss and keep what shows you a profit."
Reminiscences of a Stock Operator
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DRP Overview
Dividend Reinvestment Plans (DRPs, DRIPs)
Want to buy stocks without a Broker and pay no commission? Check out this site. You'll learn how to buy stock direct from the issuing company, using DRPs. DRPs are offered by over 1300 companies and many allow Direct Stock Purchase (also called DSPs, DPPs, DPSs, SIPs or SPPs). DRPs will reinvest your dividends and allow you to make Optional Cash Purchases (OCPs) when you want. And you pay little or no commission. The benefits:
- Buy stocks direct! No Broker.
- Little or No Commission!
- Great for retirement fund.
- Great for college fund.
Dividend Reinvestment Plans are referred to by many names/acronyms (we use DRP). These plans all serve the same basic purpose; they allow you to purchase stock direct from the issuing company. DRP plan terms and conditions differ. Each company describes its plan in a "Prospectus." Shareholder status (normally one share) is required by most DRPs. Some plans allow you to make your initial stock purchase direct, no broker needed. But be cautious, "direct plan" fees are generally higher. Read the "Prospectus" before you invest in any stock.
Stock1 offers the best research links on the Internet to assist DRP investors. Browse the list of all the participating Dow30 and S&P 500 that offer DRP's at DRP Stock List. You will find a wealth of FREE information linked to each stock.
Why Buy Stock?
Stock is a good way to invest for the future, the most logical for most of us. Buy stock and you own an equity position in the company. There are several benefits:
- Very little time required.
- Doesn't interfere with your career.
- The knowledge lasts a lifetime.
- You may become financially independent!
Success in investing, like any other activity, is the result of knowledge. Commit yourself to understanding the world of investing. You will find it exciting and you will find it the surest way to reach major financial goals.
Why Buy DRPs?
DRPs allow you to purchase stock direct from the issuing company. And hundreds of companies offer programs. When you invest in DRP stocks, you get many benefits:
- Buy direct.
- No broker, No commission.
- 1300+ DRPs available.
- About 500 of the largest 900 companies offer DRPs.
- Invest when you want.
- Invest as little as $10 periodically.
- They are easy to use.
- Proven way to financial security!
How Do I Start a DRP Program?
It can be confusing, but it is really very simple to do. Let's assume you have decided to start a DRP Program investing in Coca-Cola. Remember the contact information and transfer agent is company-specific for Coca-Cola. These specifics do not apply to other companies. Here's
what you do.
- Research the Stock: You can get the best free research information on the internet through our links in the "Stock Research" section. As an example, you can research Coca-Cola at: Coca-Cola research link
- Get the Prospectus: The prospectus describes the program in detail. It is available from the company or the transfer agent that administers that program. Its FREE! So let's look at the Coca-Cola example.
Contact the transfer agent for Coca-Cola: First Chicago Trust Co. 1-800-446-2617. Ordering the Prospectus is automated, enter 'COC' on your telephone keypad, confirm your selection to get the "dividend reinvestment prospectus"
- Qualifying for the Program: To qualify for the Coca-Cola DRP Program, you must own at least one (1) share of Coca-Cola stock. This is a typical requirement of most DRP Programs.
Stock Brokers are the typical source for the initial share. I have used Dean Witter (Stock Broker) in the past, they charge a commission of about 10% of the stock value. Of course, you can buy the stock from any broker. Instruct the broker to register the stock in your name and mail the stock certificate to you. You must be a registered shareholder to qualify! Getting the initial share is the biggest hurdle to getting started in a DRP Program, but with a little persistence you will get it done.
- Enrollment Form: Once you have the certificate, contact First Chicago Trust Co (the transfer agent) to request an enrollment form. Complete the form and you will be enrolled. You will get a periodic statement of your account, with a tear off form to buy additional shares. You can also sell your Coca-Cola stock through the transfer agent. Fees for the Coca-Cola plan are minimal, its all explained in the prospectus.
Simple as 1-2-3-4 . . .
The wealth building strategies of Stock1 involves investing in stocks, with a special focus on DRPs. We do not sell stock, we do provide the ideas and research information that will help you succeed in stock investing.
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