How to buy Stocks without a broker
Stocks are a good way to invest for the future and the most common way to buy stocks is through a broker. But many investors are not aware of the alternative ways to acquire stocks and mutual funds without the need of a broker. Buy stock and you own an equity position in the company. There are Dividend Reinvestment Plans (DRP) allow you to purchase stock direct from the issuing company. Consumers can now set up an online brokerage account and buy and sell stocks without ever having any contact with a stock broker.
Before you buy a stock, make sure you understand what risks you face in buying into that company, or investing in that industry or sector. Because buying stocks without a broker isn’t just about making money, it is also about understanding what company, industry and economic factors could cause you to lose money while you own a certain position.
1. Invest through the company’s direct stock purchase plan. Many established companies offer a direct stock purchase plan as an option to own shares of their company. A direct stock purchase plan allows investors to buy shares directly from the company. These stocks will mostly have a minimum deposit and later it will automatically withdraw from your checking or savings account if you agree. This way, the company automatically purchases stock for you by debiting your bank account every month. This can be an easy and relatively painless way to save.
2. Find out the company that doesn’t offer a direct stock purchase plan and whether it has dividend reinvestment plan (DRIP) program the cash investments option. DRIPs are a great tool for growing your portfolio but they also have a hidden feature that most people don’t know. The big benefit here is the fact that the investor is allowed to purchase fractional shares, allowing all your money to begin building wealth.
3. In many leading corporations companies allow to buy a single share through a specialized service. While this may seem like a novelty gift, it provides the needed requisite to enroll in a DRIP. Once the share is in your possession, the enrollment paperwork takes only a few minutes. After you’re enrolled, you can start building positions in your favorite stocks while avoiding those pesky brokerage commissions.
4. Research the stocks you want to invest in on online. There are many online trading companies that allow you to set up and trade stocks online without brokers. Once you have researched each company and make a decision on which company you want to trade online, it is time to set up and fund your trading account.
Whichever companies you look into, you should research them completely. Be sure to find out what the fees are for setting up and maintaining the account, as well as the per trade fee charged. Once you decide to buy a stock, you will need to process the order.