Buying Stock without using a Broker
Posted on April 25, 2008 in the Stocks category
.Even though the most popular way to buy and sell investments is to open a brokerage account it is not a necessity when it comes to buying stock. A lot of people that invest do not know that there are alternatives in the way that they buy stocks and mutual funds. Working with a reputable broker has some advantages it can be better, in certain cases, to buy stock directly without using a broker.
Here are three ways that you can buy direct stock without using a broker.
* Invest through a direct stock purchase plan of a company. There are a number of companies that offer direct stock purchase plans. These types of plans will allow you, the investor, to buy shares stock directly from the company. Most of these plans have a minimum deposit, but many times they will waive it if you agree to monthly automatic withdraws from either your checking or savings account. By doing this the company will automatically purchase stock for you, by taking money out of your account each month. This is an easy way to save money on a broker.
* Take advantage of the dividend reinvestment plan (DRIP) program’s option for cash investment if the company you are looking to buy stock In does not offer a direct purchase plan. A DRIP is a great way to expand your portfolio and they also have a little known hidden feature, which many people are not aware of. This option is the cash investment option. Most of these types of plans allow you to send in a check in any monetary amount in excess of $10 or $25 to the administrator of the program and then they will but shares for you. The major benefit of this is the fact that the investor can buy financial shares and then let those shares build up in value. The only catch is that you must own at least 1 share of the company before you can enroll in the program.
* Purchase a single share through a specialized service. Companies, such as One Share, will allow you to purchase a single hare of stock, which is framed, in many of the leading companies. It may seem like these shares are just a novelty it gives you the requirements to then enroll in a DRIP program. Once you own the share you can begin to build positions in your favorite stocks and not pay any brokerage commissions.
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