02-03-2015, 12:37 AM
(This post was last modified: 02-03-2015, 08:28 AM by Dividend Watcher.)
There is no catch.
Years ago, I had one with Schering-Plough. Did quite well and there were no fees. Everything was done through Mellon Bank. The company paid any fees. The only hassle was you had to have at least 1 share in certificate form so it was registered in your name before you could sign up. Then when you wanted to transfer that share to the account or sell it, you had to have a signature guarantee on the paper certificate. That had to be done at a commercial bank or a registered broker around here. Otherwise, it was an easy way to ease into a position when you had some spare cash around.
Sadly, the big boys got involved and now there are lots of fees for many of them. The only thing you're showing is the fee for sale (HCP has a $10 setup fee) and you can get around that by transferring the shares to an online broker when you want to sell it. It's a little like Loyal3 in that if you only have $25 or $100 on you at the time, you can still invest instead of waiting to accumulate enough to trade through a brokerage.
Also, I don't believe you can set them up as an IRA arrangement so they are taxable accounts. If I had more spare cash around and had maxed out the IRA, I'd be looking at them myself.
Years ago, I had one with Schering-Plough. Did quite well and there were no fees. Everything was done through Mellon Bank. The company paid any fees. The only hassle was you had to have at least 1 share in certificate form so it was registered in your name before you could sign up. Then when you wanted to transfer that share to the account or sell it, you had to have a signature guarantee on the paper certificate. That had to be done at a commercial bank or a registered broker around here. Otherwise, it was an easy way to ease into a position when you had some spare cash around.
Sadly, the big boys got involved and now there are lots of fees for many of them. The only thing you're showing is the fee for sale (HCP has a $10 setup fee) and you can get around that by transferring the shares to an online broker when you want to sell it. It's a little like Loyal3 in that if you only have $25 or $100 on you at the time, you can still invest instead of waiting to accumulate enough to trade through a brokerage.
Also, I don't believe you can set them up as an IRA arrangement so they are taxable accounts. If I had more spare cash around and had maxed out the IRA, I'd be looking at them myself.
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“While the dividend itself is merely a rearrangement of equity, over time it's more like owning an apple tree. The tree grows the apples back again and again and again, and the theoretical value of the tree doesn't change just because of when the apples are about to fall.” - earthtodan
“While the dividend itself is merely a rearrangement of equity, over time it's more like owning an apple tree. The tree grows the apples back again and again and again, and the theoretical value of the tree doesn't change just because of when the apples are about to fall.” - earthtodan