Every stock market investor is aware of the role that a stock broker plays when it comes to buying and selling a stock, but what many investors don't know is that lots of companies will sell stock directly to an investor without the use of a broker. Buying without a broker can have advantages, such as lower fees. It is also possible to set up automatic monthly stock purchases, including the purchase of fractional shares, as well as the automatic reinvestment of dividends.
Find one or more companies that you feel confident are doing well and whose stock you see going up in value in the near term.
Contact the investor relations department at the companies you are interested in and ask whether they offer a direct stock purchase plan. Many, although not all, companies do. Ask about any minimum amount of stock that must be purchased and ask about fees. Many companies wave their minimum stock purchase requirements and even most or all of their fees if you agree to automatically purchase a certain amount of stock each month through an automatic debit of your checking or savings account.
Do not hesitate to contact a company and ask about their direct stock purchase plans even if there is no mention of such plans on the company's website. Federal law prohibits companies from advertising their direct stock purchase plans so in many cases you must ask a direct question before you can get an answer.
Decide whether the fees involved with the direct purchase of stock are lower than the commission you would pay to a discount stock broker. If everything looks good, fill out all of the paperwork required and send in your first payment.
Keep the share certificates that you receive in a safe place. If lost or stolen, the shares cannot be replaced easily.