How do I invest in the stock market without using a broker? Be specific, thanks.?
Question by skier72: How do I invest in the stock market without using a broker? Be specific, thanks.?
I’ve never invested in the stock market, but would like too. I heard you can buy stocks without a broker. Any info would help.
Best answer:
Answer by gosh137
The way is called a “DRIP” or Dividend ReInvestment Plan. Now in order to get the dividneds to reinvest, you must be an owner of the stock. But, many companies have plans that allow you to send money directly to them to buy the initial shares. You just have to visit the web site of each company you are interested in (usually “companyname.com”) and click on their “investor relations” tab. You can also check on www.directinvesting.com, a web site for the moneypaper which deals with drips. There is a tab to read a free sample issue. Also use a search engine to look for drips.
What do you think? Answer below!
Buy low-cost index funds direct from Vanguard.
You generally need a broker to buy and sell securities because someone has to match up the buyers and sellers. However if you totally want to avoid the brokers an option would be to invest directly into companies through their DPP (Direct Purchase Plan) and then ongoing via DRIP (Dividend Reinvestment Plan) plans. No comissions are the big issue which is probably what you are planning to avoid. However limited selection and more work on your part are the downsides.
Go to cmputershare.com and look at the information on direct reinvestment plans. These are plans by known companies from which you may buy shares directly. You usually have to own at least one share of stock from a broker to enroll, but some companies like Exxon-Mobile will set you up an account for 250.00 and that money will go directly toward stocks. Try to find the stocks with the best dividend yield and your shares will grow quickly because your dividends are reinvested. also look for the lowest fees as the holding companies charge small fees for selling shares and reinvesting dividends. These fees are around 15 cents per share for selling and maybe 2-3 cents for reinvesting . some companies like Altria charge a 5.00 fee for buying, so unless you have deep pockets , beware of these. Drips are still cheaper than a broker if you play it right but they are slowly getting more expensive. I also have shares in a share builder account. Check out sharebuilder.com and for 4.00 you can a buy stock and they will automatically reinvest the dividends free. Just remember if you go this route you are paying 4.00 per stock that you buy.