Buying Stocks

Monday, May 26, 2008
There are two main ways to purchase stock: You've now learned what a stock is and a little bit about the principles behind the stock market, but how do you actually go about buying stocks? Thankfully, you don't have to go down into the trading pit yelling and screaming your order.

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; they 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.

2. DRIPs & DIPs
Dividend reinvestment plans and direct investment plans are plans by which individual companies, for a minimal cost, allow shareholders to purchase stock directly from the company..

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