Stock Basics: buying Stock
There are three main ways to buy stock:
1. Using a Brokerage
The most common method to buy stocks is to use a brokerage. Brokerages come in two different flavors. Full-service brokerages offer you (supposedly) expert advice and can manage your account but also charge a lot. Discount brokerages offer little in the way of personal attention but are much cheaper.
At one time, only the wealthy could afford a broker since only the expensive, full-service brokers were available. With the Internet came the explosion of online discount brokers. Because of them nearly anybody can now afford to invest in the market.
2. DRIPs & DIPs
Dividend Reinvestment Plans (DRIPs) and Direct Investment Plans (DIPs) are plans with which individual companies, for a minimal cost, allow shareholders to buy stock directly from the company. Drips are a great way to invest small amounts of money at regular intervals.
3. Buy a single share through a specialized service
Companies such as One Share allow you to buy a single, framed share of stock in many leading corporations. While this may seem like a novelty gift, it provides the needed requisite to enroll in a DRIP. Once the share is in your possession, the enrollment paperwork takes only a few minutes. After you're enrolled, you can start building positions in your favorite stocks while avoiding those pesky brokerage.
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