How to Buy Stocks Without a Broker

You can purchase stocks and avoid the high commissions charged by brokerage firms with alternative investment strategies. One way is to set up an on-line brokerage account. It’s cheap and simple to do, plus you’ll learn about investing first hand. Another way is to buy stocks directly from a company through a direct purchase plan. Investing your money in stocks has never gotten easier.

Difficulty: Moderate

Instructions

Things You'll Need:

• Investment Funds
• computer
• phone

On-line Brokerage Account

1. Open an account with an on-line brokerage firm. Some investment websites to look at are: Sharebuilder, eTrade, ScottTrade, Ameritrade, TD Waterhouse, etc.

2. Deposit money into your account through an electronic funds transfer from your regular bank account so you have funds to invest.

3. On-line brokerages have literally thousands of company stocks, bonds and exchange traded funds (ETFs) to choose from. Use the investment tool tutorials to orient yourself with the products offered.

4. Make your stock picks, type in the ticker symbol and the number of shares you want to invest in and place your order. Transactions cost between $4.00 to $20.00, depending on the firm.

Direct Purchase Plans (DPP)

5. Choose your stock, go to the company’s website and look for the “Investor Relations” page.

6. Contact Investment Relations either by phone or e-mail and ask if they participate in Direct Purchase Plans. DPPs for the purchase of a company’s stock is usually handled through the company’s transfer agent. Costs are very low and depend on the handling agent’s fees.

7. Set up an account with the company you want to purchase stocks from with the transfer agent, send them your check and they will invest your funds in that company.

Resources

• Sharebuilder
• eTrade