Comparing Direct Purchase Stock Plans

Direct purchase stock plans are an excellent way to begin investing, since you don't have to pay the brokerage fees and other costs that would be associated with buying stocks through a third party. Not all direct purchase stock plans are the same, however, as some may have their own costs added in or may feature limits on exactly how much stock you can buy through the plan. Taking the time to compare the direct purchase plans that different companies offer for their stock can help you to choose the best investments for your financial goals; here is what you should consider when comparing different direct purchase stock plans in hopes of choosing the best.

Difficulty: Moderately Easy

Instructions

1. Research the actual stocks that are being offered by the different direct purchase stock plans. There's no point in investing your money in a stock that isn't going to perform well, even if you get a good deal on the purchasing fees. Look for basic information on the companies, how much the different stocks are currently selling for, and how well the stocks have been performing in the last 6 to 12 months.

2. Look at the specifics of the direct purchase plans of the companies with the most promising stock options. Pay special attention to any service charges that may be added on to the cost of the stock shares, whether there are limits on how many shares you can buy at a time (or in total), and whether you will be able to receive or reinvest dividends off of the shares that you buy. Ideally you will be looking for plans that offer low charges, high or no limits, and a good reinvestment program so that you can let your shares grow as dividends are paid.

3. Make a list of the best qualities of each plan to make it easy to compare them later. Beneath each company's best qualities you should also list the worst qualities of the plan so that the drawbacks and costs can be taken into consideration as well.

4. Compare the direct purchase stock plans that seem most promising by looking at how much each share will cost you and weighing the pros and cons of the plans themselves. Keep in mind that there's nothing from keeping you in investing through more than one plan, so if you find two or three direct purchase stock plans that seem to offer great deals on quality stock, then purchase shares through all of them and start diversifying your portfolio from the start.