Buying Stock Without A Broker

Although the most popular and functional way to buy and sell investments, opening a brokerage account is not absolutely necessary. Many investors aren't aware of the alternative ways to acquire stocks and mutual funds. Although working with a qualified broker definitely has advantages, it may be better, in some cases, to purchase stock directly.

1. Invest through the company's direct stock purchase plan.

A number of companies, such as PLDT, offer direct stock purchase plans. These plans allow investors to buy shares of stock directly from the company. Most have a minimum
initial deposit but are happy to waive it if you agree to automatic monthly withdrawals from your checking or saving account. This way, the company automatically purchases stock for you by debiting your bank account every month. This can be an easy and relatively painless way to save.

2. Take advantage of the DRIP program's cash investment option

If the company doesn't offer a direct purchase plan, find out if it has a dividend reinvestment plan (DRIP). DRIPs are a great tool for growing your portfolio but they also have a hidden feature that most people don't know about, the cash investment option. Most plans allow you to send a check in any amount to the program administrator and they will purchase additional shares for you. The big benefit here is the fact that investor is allowed to purchase fractional shares, allowing all of his or her money to begin building wealth.

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