Many traders and investors still buy and sell stocks with the broker as the middleman. However, if your concern is how to purchase stocks without a broker, then you will find the answers below. Schwab Options Commissions
Of course, this presupposes that you have the necessary knowledge, experience and information about the stock market. Add in the willingness to pour in the time and effort to arrive at logical decisions and you will make good profits.
Direct Payment Plan
If you have already identified the company you want to invest in, then the direct payment plan is the most cost effective method. There are many popular companies like Walt Disney that offer this option for interested investors.
Keep in mind that each company will have different policies on the direct payment plan. You will either be permitted to apply online or be required to fill in documents or be asked to invest in a minimum amount. Some companies waive the minimum amount on the condition that your bank account will be automatically debited every month.
Although a broker is not involved in a direct payment plan, your investment will be handled by a transfer agent. You are usually informed of the amount of shares and the time of purchase according to company rules. The transfer agent may or may not charge a fee for his services.
Now you know how to purchase stocks without a broker, but that does not mean that you have escaped the equivalent of the broker's commissions. If you are an employee of the company, you may be able to own shares of stocks through an Employee Stock Purchase Plan. Usually, small discounts are offered. Schwab Options Commissions
Dividend Reinvestment Plan
If you do not have the financial resources to own bundles of shares in the company, you can avail of the dividend reinvestment plan. Basically, you must own at least one share to enroll in the plan. You will then deposit fixed amounts of money to the program in order to buy more shares.
This way, you can purchase fractions of shares each time payment is made. In time, you would have accumulated bundles of shares with your small payment increments and, hence, build up on your wealth. You actually have the benefit of dollar-cost averaging.
There are also brokerage companies like Charles Schwab and TD Ameritrade that provide for online direct stock investments services. You will be charged fees for most transactions. However, you have the benefit of buying and selling stocks on your own instead of going through the brokers. This way, you save on the hefty commissions.
You can also buy a single share of stock from specialized services like One Share. Said share usually comes in a frame, which makes for a great gift. Beyond its gift-giving aspect, this is one way to enroll in a dividend reinvestment plan. Enrollment takes just a few minutes. After that, you can start building on your investment portfolio without the hefty broker's commissions taking away huge chucks of your profit.
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