Is this a DRIP?

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my name
Posts: 542
Joined: Sun Dec 23, 2007 4:28 pm
Location: NJ

Is this a DRIP?

Post by my name » Tue Feb 13, 2018 6:44 pm

I have mutual funds and some individual stock at Vanguard. One stock is for Bank of New York, I transferred these shares to Vanguard many years ago and did not check the box to reinvest dividends, then one day I did and have reinvested ever since. I have added no new money.

In 2017 I sold all of the bank stock. The tax form uses the date for covered stock transactions starting 01/01/2012 that is for mutual funds and DRIP plans. For stock purchases the date is 01/01/2011.

Is what I have at Vanguard a DRIP plan? I'm reading that a DRIP plan is typically from the company’s own reserve, they are not marketable through the stock exchanges. Shares must be redeemed directly through the company. DRIP plans typically have no commissions and a price discount, the cost basis for owning the shares can be significantly lower than if the shares were purchased on the open market.

livesoft
Posts: 62699
Joined: Thu Mar 01, 2007 8:00 pm

Re: Is this a DRIP?

Post by livesoft » Tue Feb 13, 2018 6:47 pm

Yes, this is a DRIP.

Your reading is about old-style practically obsolete DRIPs. Computershare was often the custodian. They might have been useful back in the days when commissions to trade stocks were in the hundreds of dollars and even mutual funds had 8% front-end loads and high fees. Nowadays with brokerages that have no commissions for stocks and no-load mutual funds, there is really no reason to participate in one of those old-style DRIPs.
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my name
Posts: 542
Joined: Sun Dec 23, 2007 4:28 pm
Location: NJ

Re: Is this a DRIP?

Post by my name » Tue Feb 13, 2018 6:51 pm

Thank you ! For being so clear.

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