How to Invest in Publicly Traded Companies
The most common way to invest in publicly traded companies is to simply buy stock in a company. Buying stock in a publicly traded company is known as taking an equity position in that company. There are basically two ways for the average investor to purchase stock in a publicly traded company. One way is to purchase stock through a stock broker or an online brokerage firm. The other way is to make a direct purchase of stock from the company itself. Not all companies allow investors to buy stock directly from them, but those that do generally make their stock available with fewer fees.
Other People Are Reading
Instructions
-
-
1
Decide whether you are more comfortable purchasing stock the traditional way through a stock broker or whether you would like to invest by purchasing stock directly from a company. Generally speaking, if you plan to buy and sell stock relatively frequently you may be better off using a standard stock broker or online brokerage firm. If you are planning to buy and hold stock for the long term. then you may save commissions and other costs by buying stock directly from the company you are interested in investing in.
-
2
Open a trading account with a stock broker or an online brokerage firm if you are planning to purchase stock for trading rather than long-term investment purposes.
-
-
3
Call your broker and place orders for the stock you wish to purchase or use the online trading platform provided by your online brokerage firm to make standard purchases of stock in publicly traded companies.
-
4
Do your research to find companies that allow individual investors to make direct purchases of stock (see Resources). Follow the directions provided by the individual companies for making purchases of their stock.
-
1
Tips & Warnings
Stock purchased through direct purchase plans may not be as fast and as easy to sell as stock purchased through a broker or through an on-line brokerage house. If speedy transactions are important to you, then consider making your investments through a conventional stock broker or on-line brokerage.
Stock purchases made through direct purchase plans should be considered long-term investments that are to be held during short-term market fluctuations.
