Direct Stock Purchase Plans


Direct Stock Purchase Plans

A direct stock purchase plan is a cheap way to invest direclty through the company bypassing the broker.  This can also be teamed with a Dividend Reinvestment plan and allows you to bypass brokers and their commissions.

Admittedly it is more difficult to valuate a company and insure you are not overpaying and to properly diversify but there are many major corporations like Coca-Cola and Pepsi and Johnson and Johnson and Johnson that are sound and not horrifically expensive. The danger lies in the fact that if you don’t know how to valuate securities then it will be difficult to know when not to purchase.

Nowadays discount brokerages are available to people with even the least amount of money and will very small fees and allow you to buy index funds which will diversify better then anything you could do with a small amount of money.