Buying stocks without a broker: Buy direct from the company
Buying stocks without a broker is an option that is definitely worth trying for and it will increase your gains. Most small investors have the impression that you can invest not without a stock broker if you want to invest in the stock market. That is definitely true as far as the stock market for beginners advice that has been dished out by several people. Well the reason is that it is easy to buy the shears though a broker. Now that broker may be a full service broker or a discount stock broker.
Direct purchase plans.
A lot of companies allow you to invest in the companies shares by enrolling in their share purchase plan. These companies will generally encourage you to invest in a monthly plan as it is then becomes relatively hassle free way of investing. You can even buy one time but then these companies charge some amount of fees.
Some examples of the companies that allow this are
IBM
Coca-Cola
Pfizer
A&T
Walt Disney
Dividend reinvestment plans called (DRIP)
A lot of companies allow you to invest the dividend that you get in cash to be converted into equivalent shares. This means that you should already have the stock of that company (which may not have been purchased directly but via a broker).
Buying a single share certificate
You can buy a single share as a gift from some companies. These are generally used as gift though but then you can get started by buying one share and then get yourself into a DRIP.
What is the benefit?
You would wonder what the benefit to the company is when you buy directly from the company. Well if you buy from a company you cannot buy shares on any given day. The company will buy them on your behalf. You have no control over when the shares will be bought. In turn what has happened is that company is saved from the price fluctuations. You have the benefit that you have been able to save money.
Another very good option is that there are brokerage companies that offer the investment plans where they will buy shares on your behalf and others by pooling in the money. That will mean that you can tell them the share that you are interested in and the amount also. In essence you are even buying fractional shares in the company.
The way this discount broker will work is that they have a day specified when they will buy the shares. Let us say on Tuesdays. These companies will buy the shares for a lot of people who requested the same scrip as you. You will get the shares worth the amount for which you have a monthly or weekly plan set up.This is good way to invest as then you need not monitor the amount daily and you can easily forget daily tracking of stock market. This is a very good way of investing for long term and achieving the dollar cost averaging for a stock.
You can definitely save money by buying stock directly from the company as well as you can make good gains by capital appreciation over a longer period.
Related posts:
- Dividend reinvestment plans
- Dividend investing for stocks with high dividends choose DRIPs
- Buying stocks online – How to choose online stock brokers
- How to buy stocks – Step by step guide
- Buy one share of stock
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