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How to buy stocks without a broker?

Managing your own brokerage account, thereby bypassing the need for a stock broker, has become an increasingly popular option for many traders around the world.

Dealing with stocks these days doesn’t require you to have your own broker since you trade on your own with the help of the Internet. All that you need to do is to set up your own account online and get to start trading soon. This is the answer that investment firms gave their customers who wish to either sell or buy stocks on their own. So what are the steps needed to buy stocks without a broker? Listed below are the basic steps that you can follow to be able to deal with trading stocks online.

First, you can invest in the company through its direct stock purchase plan. Many popular companies like Walt Disney offer such a plan to interested individuals who want a share of the magic without spiraling into bankruptcy. You will find that investments in direct stock purchase plans can make thousands of profits on just a few hundred of dollars in capital investment, if and when you know how to choose good stock picks.

The terms and conditions of the plan will vary but most are affordable. For example, the company will require a certain amount of deposit for one share. Your subsequent acquisition of other shares will be through automatic debiting of your account on a monthly basis. You are basically saving money albeit in the form of stocks in a profitable company, not currency in the bank.

Online Trading Companies

Using an online brokerage firm may, technically speaking, still count as a “broker”, but only because unless you buy shares directly from the corporation itself, you simply cannot buy them independently. Online firms such as these provide a buying and selling platform that is non-invasive and usually offer a flat commission per trade.

Research the stocks you want to invest in. Most of these online trading sites also provide research material so you can educate yourself on the stocks and bonds you may be interested in buying. You should do a lot of research on any stock before you decide to invest your money in the stock. These sites also help you to understand finance and trading terminology that you may be familiar with. It is important that you make informed and educated decisions to help reduce the risk of loss of your money.

Invest through the company’s direct stock purchase plan

A number of companies, offer direct stock purchase plans. These plans allow investors to buy shares of stock directly from the company. Most have a minimum initial deposit but are happy to waive it if you agree to automatic monthly withdrawals from your checking or savings account. 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.

Take advantage of the DRIP program’s cash investment option

Many companies also offer something called Dividend Reinvestment Plan or DRIP, in which all dividends are reinvested in additional shares rather than being deposited into your bank account. If you want to buy stocks without a stock broker, enrolling on a DRIP program may be the easiest and quickest, as it can often be done online in a couple of minutes, even by inexperienced investors. Some companies require you to own a share in the company before you can enroll in their DRIP plan. This can be done easily if the company you are interested in is a big one, as most corporations have shares available for sale to the public.

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30. Jan, 2012
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How to invest in the stock market with little money

If you are a beginner, familiarize yourself with stock investing basics before proceeding to invest in the stock market.

Investments are not only a way the elite consolidate their riches but a wealth-building tool the average worker can employ quite easily. An encyclopedic knowledge of finance isn’t even necessary if you possess common sense and patience. Investors typically lose in the market in only one of three ways, those being panic, inattention to transaction costs, and failing to account for unknowns.

First let me tell you the fact that your friend has deliberately revealed half the truth! How?  People conceal their mistakes that they make in the stock market of losing money.  Let me further drive home the point that you can’t make money consistently by trading daily in the stock market or one fat buck overnight.  You will be losing more than what you make by trading often.  The odds are more against you if you want to successfully trade and take home money daily.  In short, you cannot win the daily bread and butter in the stock market or one fat buck in a single shot! Never heed to anybody.  You should be able to justify yourself the price for which you bought a scrip. Of course, the money used to buy here has not to be borrowed or cash kept aside for some other purpose.

We’re not here to tell you where to invest your money. We won’t lay out a handful of stocks on a “buy” list. But what we can tell you is how you can invest your money — the mechanics of investing small, large, and medium amounts of cash. We can even help you choose a broker.

Let’s start with $20. We’re going to assume that you’ve already paid off any high-interest debt and that you have some money stashed in a safe place (like a savings or money market account) that you can get to quickly in case of an emergency expense. Now you find yourself with a little extra dough, and you want to begin investing for your future.

Is it even worth it to invest such a pittance?

Heck yeah it is! One of the best ways to invest small amounts of money cheaply is through Dividend Reinvestment Plans (DRPs), also known as Drips. They and their cousins, Direct Stock Purchase Plans (DSPs), allow you to bypass brokers (and their commissions) by buying stock directly from the companies or their agents.

More than 1,000 major corporations offer these types of stock plans, many of them free, or with fees low enough to make it worthwhile to invest as little as $20 or $30 at a time. Drips are ideal for those who are starting out with small amounts to invest and want to make frequent purchases (dollar-cost averaging). Once you’re in the plan, you can set up an automatic payment plan, and you don’t even have to buy a full share each time you make a contribution.

How to invest couple of hundreds dollars?

Once you’re up to $600, your investment options open up a bit more. You can still buy an index fund, and now you’ll have your pick of fund companies that require higher initial investments. This freedom will enable you to shop around for a fund with the lowest expense ratio. You should also seriously consider opening a discount brokerage account.

Think buying stocks as buying fractions of businesses that have strong fundamentals whenever they are sold cheap with little or whatever spare cash you have.  Analyze the financials of
the business that you think is attractive. Be it a bull market or bear market, be it a black Monday or a dark Friday, an election year or a non-election year, if you find an attractive business selling at a discount price, never have a second thought.  Buy whatever quantity you can and forget it.  Forget about the humbugs of technical analysis and historical prices.

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29. Jan, 2012