How to Buy Stocks Without a Broker

The question of how to buy stocks without a broker often comes up in conversations among novice investors. The most common reason for doing away with the services of a broker include lesser costs incurred since the fees, commissions and charges are eliminated although other reasons exist as well.

No matter the reasons, nonetheless, you want to ensure that you know the basics of the ways in buying stocks sans a broker. You will then be able to choose the best way according to your own needs, wants and goals in building your investment portfolio on your own. Here then are the ways on how to buy stocks without a broker.

First, you can invest in the company through its direct stock purchase plan. Many popular companies like Walt Disney offer such a plan to interested individuals who want a share of the magic without spiraling into bankruptcy. You will find that investments in direct stock purchase plans can make thousands of profits on just a few hundred of dollars in capital investment, if and when you know how to choose good stock picks.

The terms and conditions of the plan will vary but most are affordable. For example, the company will require a certain amount of deposit for one share. Your subsequent acquisition of other shares will be through automatic debiting of your account on a monthly basis. You are basically saving money albeit in the form of stocks in a profitable company, not currency in the bank.

Yet another way on how to buy stocks without a broker is through the company's dividend reinvestment plan (DRIP). In many ways, the DRIP also calls for dripping money into the purchase of the shares one dollar at a time until the investor has bought the desired number of stocks in the company.

The assumptions with the DRIP way are that, first, the company does not have a direct purchase plan and, second, you have at least one share in the company. Don't worry as there are many companies specializing in DRIPs.

So, how does the DRIP work? The dividends received on the present shares will be reinvested in buying new shares. You can also give money into the fund to augment the dividends on the shares and, thus, facilitate the faster expansion of your portfolio. This way, you can purchase fractional shares a fraction at a time.

Also another good way on how to buy stocks without a broker is to purchase through a specialized service. We suggest the One Share site where you can buy one share of stock that will then be framed in glass. Yes, it may look like a novelty gift but it is not since the framed certificate of stock is your entry into the issuing company.

You can then start building your portfolio from that single share. Think of joining the DRIP as well.

Indeed, these ways on how to buy stocks without a broker are relatively simple when you come to think about it. The hard part comes when you have to choose the right company to start building your stocks portfolio but that's another story.