How to buy stocks directly from the company
You can set up an account by depositing cash or stocks in a brokerage account. If you prefer buying and selling stocks online, you can use sites like E-Trade or Ameritrade. Those are just two of the most well-known electronic brokerages, but many large firms have online options as well. The broker executes the trade on the your behalf. In turn, he or she earns a commission, normally several cents per share. Online trading sites typically charge lower commission fees, because most of the trading is done electronically.
How to Buy Stocks
You may be the sort of person who likes to cut out the middleman in any transaction and so you're asking if you can get stock in a company without going through a broker. Many publicly traded companies offer direct stock purchase plans. A DSPP is an investment account you use to buy stock directly from the company. DSPPs have some real advantages for small investors. They have some disadvantages as well, so you need to think things through before jumping into this form of investing.
Basically, a DSPP is an investment account dedicated to the stock of a single corporation. When you buy stock from a broker, shares are typically registered to the brokerage firm and credited to your account.
According to Bankrate. When you consider opening a DSPP with a company, read the plan brochure or prospectus carefully. There is sometimes a one-time set-up fee and the charges for selling shares are usually higher. If this describes you, DSPPs just might be your cup of tea. This not only makes investing with a DSPP affordable, it is a great way to save money on a regular basis. The downside of direct stock purchase plans boils down to lack of flexibility.
If you want to use DSPPs to buy shares in more than one company, you have to open a separate account for each one. Another problem is that all of your investment eggs are in one basket if you have just the one DSPP because there is no way to diversify your investments. To get the risk-reducing benefits of a diversified investment portfolio, you need a brokerage account that allows you to invest in a variety of securities if you want to avoid opening up a baker's dozen or more DSPP accounts.
He writes about business, personal finance and careers. Adkins holds master's degrees in history and sociology from Georgia State University. He became a member of the Society of Professional Journalists in Lack of Flexibility The downside of direct stock purchase plans boils down to lack of flexibility. Video of the Day. Brought to you by Sapling. References Bankrate. How to Buy Individual Stocks.
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More than companies listed on major exchanges now offer small investors the option of buying stock directly from them. The types of companies you can buy stock directly from include big box stores, businesses in the restaurant industry and even some large manufacturers. DSPPs are a simple idea, really.
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You may be the sort of person who likes to cut out the middleman in any transaction and so you're asking if you can get stock in a company without going through a broker. Many publicly traded companies offer direct stock purchase plans.
Buy Stock Direct
Lowe's Companies, Inc. These plans are designed to provide individual investors with a convenient, low-fee method to become Lowe's shareholders and increase ownership of Lowe's common stock over time. Proceed to Computershare Web site. All rights reserved. Skip to main navigation. Investor Relations.
How to Buy a Stock
While many investors choose to buy and sell investments through a brokerage account , some investors may wonder how they can buy stocks without a broker. Direct investment plans offer the brokerage alternative that those investors are seeking. If your primary investing goal is to acquire a single company's stock as directly as possible, one of these plans can help you achieve that goal, but be aware of the drawbacks that come with avoiding brokerage services before you abandon them completely. Often, the easiest method of buying stocks without a broker is by participating in a company's direct stock plan DSP. These plans were originally conceived generations ago as a way for businesses to let smaller investors buy ownership directly from the company. Investors buy-in by transferring money from their checking or savings account. The company will establish minimum investment amounts, both for the initial purchase and for any subsequent purchases. The plan administrators batch the cash from those participating in the direct stock plan and use it to buy shares of the company at regular intervals and at the average market price. Companies may also offer a dividend reinvestment plan DRIP.
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Advantages & Disadvantages of Stocks Directly From the Company vs. a Broker
Achieving this is not easy, but you have to start somewhere. Investing in shares online is one of the best ways to reach this goal. And the good news is you that can do all of this completely online, from the comfort of your own home. In this article, we will explain jargon-free, in plain English, how to buy shares in a company. People usually ask about how to invest in a company because they either want to make money profits or gain some trading experience. Both are possible, and can also be fun, if you select the right stocks. You can make a profit if your share pays dividends or its price increases. This is one of the best long-term investments. Have your friends ever talked about investments or the stock market, and you had no clue what any of it meant? Don't worry, once you start investing and learning more about it, this won't happen again. You'll understand better how the stock market works and how it influences the economy, as well as your everyday life. Have you ever wanted to sit in the same room with Warren Buffet, and participate in a Berkshire Hathaway annual meeting?
I Want To Buy Shares In An Individual Company. What Do I Do?
Advertiser Disclosure: The credit card and banking offers that appear on this site are from credit card companies and banks from which MoneyCrashers. This compensation may impact how and where products appear on this site, including, for example, the order in which they appear on category pages. Advertiser partners include American Express, Chase, U. Bank, and Barclaycard, among others. Do high brokerage costs deter you from investing in stocks of financially stable, profitable companies? Once companies list on a stock exchange, they employ the services of a transfer agent, who handles all administration related to share transactions — most listed companies use Computershare to provide these services. And one of the many services Computershare provides is the administrating of direct stock purchase plans for companies who want to sell their shares to the public without engaging a stockbroker. A direct stock purchase plan allows you to buy shares of a company through its transfer agent instead of through a broker. In essence, you cut out the middleman and save yourself a pretty penny in the process.
