CVS Pharmacy Direct Purchase Plan ??

Discussion in 'Order Execution' started by Beach Man, Mar 21, 2006.

  1. I was contemplating buying CVS Pharmacy stock using their Direct Investing/ Re-Investing Dividend plan by The Bank Of New York.

    But the first thing I read about it was the following statement:

    "Shares are not protected under The Securities Investors Protection Act of 1970"

    Does this mean that they do not offer investors the same protection that a regular brokerage account does? The CVS.Com website under investor relations directs anyone interested in their direct purchase / dividend re-investment plan to The Bank of New York but I am hesitant now as due to that statement and what exactly does it mean?

    See here:
  2. If you were buying enough shares for this to make a difference, why wouldn't you use a broker, pay the commish, and get a better entry price?

    Just curious...I do not trade or invest in equities...

    Michael B.
  3. It is something I want to do like a trust for my grandson. The CVS plan is $100.00 for initial investment and then they give the option for $100.00 per month ACH every month from a checking account of mine....Something I want to do for him and just let them deduct it each and every month and then when he is 21 in 21 years :) it might be worth something...but if the stock in this plan is not protected like brokerage accounts are in case of failure then the hell with it...but I am very confused why they say the shares are not protected by the Securities Investors Protection Act of 1970... Why not?..I always thought shares in a brokerage account under The Securities Investors Protection Act of 1970 were protected up to something like $500k and up to $100k for Cash or something like that. So why shouldn't The Bank of New York who handles CVS's direct investment plan be any different?
  4. Instead of participating in a monthly purchase plan, make an annual purchase in one of those share-builder plans. You can reduce the fees you pay and transactional paperwork. Better still, make a one-time $25,200 purchase of shares for him and let it ride until your grandson turns 21 years of age. $100 per month multiplied by 12 months per year multiplied by 21 years equals 25,200 dollars. Get it over with in one shot!
  5. Ebo


    That's a great dollar cost average plan, to "get it over with " in one shot.