How to Buy Stocks Without a Broker

Video Transcript

"My name is Phillip Beningaso. I'm an investment professional and I'm going to be talking about how to buy stocks without a stock broker. This is pretty much a pretty easy process since the avenue is to go directly with the company itself. It's a pretty easy process. Most corporations have web sites that you can sign up on line and actually have an account where you transfer the money from say a checking to the corporation. And the corporation will purchases shares for you. Very easy process. Simple. Now letting the company do the work for you, it's valuable because you don't really have to pay and commissions there. There are some drawbacks to it. Let me go through some of the things here real quickly. One of the things that a company can provide to you is what's called a DRIP or a dividend reinvestment plan. A dividend reinvestment plan is where they not only purchase the shares for you but fractional shares and those fractional shares add up over time. Being able to have a longevity of time where you're purchasing shares today at a low price and then over a longer time that stock price is increasing. There's where your benefit is made. Now, again, on line is where you open up through a corporation and you enroll in that program. The tricky thing can also be is that you have to already own a share of stock to be able to participate. So that's requiring going to a brokerage firm, opening up an account, buying the shares or a share, paying the commission and then having that certificate mailed to you which there's a reorganization fee for. And then you can enroll yourself in the plan of a company at that time. Now, companies purchase usually at end of day prices which tend to be higher; where as at a brokerage firm you may only pay $9.95 for a trade but yet you can determine when you place that trade. So if you purchase 100 shares of stock and it went down 50 cents, you're going to save a lot more paying the $9.99 than you would for the closing price. So there's a little bit of determination to make there. Any information provided here is for general informational purchases only and should not be considered an individualized recommendation or personalized investment advice. Any investments or strategies mentioned here may not be suitable for everyone. My name is Phillip Beningaso and I'm an investment professional."