Direct Stock Purchase

The purpose of this blog is to disseminate information on direct stock purchase plans offered by various companies. Typically, these are offered either directly by the company or via a stock transfer agent . Stocks can be bought directly, either for free (without any brokerage fees) or a small fee (usually $1 to $3). Some plans require you to own at least one share while many do not require you to own a share to begin investing. Typically, here is how the process works:

  1. Contact company or stock transfer agent via their website
  2. Open an account (individual, joint, trust, etc) for no fee or a small fee ($10 to $20) either online or via a completed application form
  3. Meet initial minimum investment amount ($0 to $1000)
  4. Purchase additional shares periodically, via an automated checking account debit plan or a one time payment
  5. You can sell all or some shares for a flat fee ($10 to $15) and a brokerage fee (pennies per share).

I have found these plans to be well suited for my investment philosophy, which I'll call 'Slow and Steady". It is best suited for someone with a long term timeline and investing for a college fund or a retirement fund. It is not suited for someone with a shorter timeline.

Since 2001, which is when I first came across these plans and invested my first buck, I have invested in the following companies:

  1. Aqua America (still own) (Google Yahoo Earnings Chart)
  2. Caterpillar (still own) (Google Yahoo Earnings Chart)
  3. Duke Energy (still own) (Google Yahoo Earnings Chart)
  4. EquityOffice Properties (sold out 2006)
  5. Exxon Mobil (sold out 2006) (Google Yahoo Earnings Chart)
  6. Home Depot (sold out 2006) (Google Yahoo Earnings Chart)
  7. Paychex (still own) (Google Yahoo Earnings Chart)
  8. Pfizer (still own) (Google Yahoo Earnings Chart)
  9. Schnitzer Steel (sold out 2007) (Google Yahoo Earnings Chart)
  10. Sonoco (sold out 2007) (Google Yahoo Earnings Chart)
  11. iStar Financial (sold out 2006) (Google Yahoo Earnings Chart)

You may be wondering why on one hand I would say that these plans are best suited for a long term timeline and on the other hand sell out on my stocks barely 5 years into the plan. We moved to California in 2005 and bought a house in early 2006 and needed much money for a down payment. I chose to sell out on some of the stocks. Why did I chose to sell those specific stocks and not others? I had various reasons, which I will delve into later.

For now, hopefully I have caught your attention and made you consider Direct Stock Purchase plans as an option to invest into your future, irrespective of what your goal is.

Adios for now. More real soon.