Direct Stock Purchase Options

Most investors prefer to trade investments through the opening of a brokerage account. However, this is not always necessary. In some cases using the alternative ways of buying and selling investments, which exclude the participation of a broker, is far better. This article aims to acquaint you with these methods of purchasing a stock directly instead of using the services of a broker.

Stock Purchase Option 1 - Using the Company's Direct Stock Purchase Plan

Many companies provide investors with the opportunity of purchasing their stocks directly from them through the use of a direct stock purchase plan. So, if you sign for such a plan, you will be able to purchase shares of stock directly from the source.

Such plans require a minimum initial deposit. However, it can be waived if the investor agrees upon the automatic withdrawal from the checking or savings account each month. If you are willing and able to use this option, through the withdrawals the company will purchase stock on behalf of you.

Stock Purchase Option 2 - Using DRIP Cash Investment Option

DRIP stands for dividend reinvestment plan. It includes a cash investment option of which many investors are unaware. By allocating and sending a particular amount to the program administrator, s/he will purchase shares on behalf of you. If you participate in such a program you will benefit from the opportunity of purchasing fractional shares. In this way the investor will take the chance of building wealth by using all of his/her money. However, in order to take advantage of this the investor should possess at least one share of the company.

Stock Purchase Option 3 - Using a Specialized Service to Purchase One Share

Many companies provide the opportunity of purchasing only one framed share of stock that is part of many corporations achieving great success. This option has its limitation, which is the same as in the DRIP alternative. However, when you become an owner of the share, the rest of the procedure is easy and quick to complete. Having started, it is up to you to select the stocks you prefer to become part of your investment portfolio.

Finally, now that you know some of the options of purchasing a stock without the services of a broker, it is up to you to decide in which case you are going to call a broker or not.  

For a trading platform we recommend you try Zecco.
Zecco offers free stock trades, no account minimum, real time quotes, trading community, and is also insured and protected against loss by SIPC. Opening a Zecco account to benefit from $0 Stock/ETF trading is a smart idea. Free stock trades allow you to preserve more of your wealth and save money, which you can invest instead of paying brokerage commissions.

When looking to save money on trades in order to have more to invest, you should definitely check the promotion OptionsHouse is currently running. Open a new account and get 100 free trades.

For knowledge we can highly recommend you subscribe to the The Wall Street Journal.

Bookmark this page :