Stocks Basics: Buying Stocks
  1. Stocks Basics: Introduction
  2. Stocks Basics: What Are Stocks?
  3. Stocks Basics: Different Types Of Stocks
  4. Stocks Basics: How Stocks Trade
  5. Stocks Basics: What Causes Stock Prices To Change?
  6. Stocks Basics: Buying Stocks
  7. Stocks Basics: How to Read A Stock Table/Quote
  8. Stocks Basics: The Bulls, The Bears And The Farm
  9. Stocks Basics: Conclusion

Stocks Basics: Buying Stocks


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. There are two main ways to purchase 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; 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. Thanks to 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 by which individual companies, for a minimal cost, allow shareholders to purchase stock directly from the company. Drips are a great way to invest small amounts of money at regular intervals.

Stocks Basics: How to Read A Stock Table/Quote

  1. Stocks Basics: Introduction
  2. Stocks Basics: What Are Stocks?
  3. Stocks Basics: Different Types Of Stocks
  4. Stocks Basics: How Stocks Trade
  5. Stocks Basics: What Causes Stock Prices To Change?
  6. Stocks Basics: Buying Stocks
  7. Stocks Basics: How to Read A Stock Table/Quote
  8. Stocks Basics: The Bulls, The Bears And The Farm
  9. Stocks Basics: Conclusion
RELATED TERMS
  1. Treasury DRIP

    A dividend reinvestment plan that uses dividends to purchase ...
  2. Dividend Reinvestment Plan - DRIP

    A plan offered by a corporation that allows investors to reinvest ...
  3. Full-Service Broker

    A broker that provides a large variety of services to its clients, ...
  4. Brokerage Account

    An arrangement between an investor and a licensed brokerage firm ...
  5. Commission

    A service charge assessed by a broker or investment advisor in ...
  6. Discount Broker

    A stockbroker who carries out buy and sell orders at a reduced ...
RELATED FAQS
  1. What effect does a company's dividend reinvestment plan have on its stock price? ...

    When a dividend is received, an investor has two options: to keep the proceeds in a bank account or reinvest them. For the ... Read Answer >>
  2. What is a DRIP?

    The word "DRIP" is an acronym for "dividend reinvestment plan", but "DRIP" also happens to describe the way the plan works. ... Read Answer >>
  3. How can an investor profit from the increase in popularity of discount brokerages?

    Find out how investors benefit when brokerages compete with each other, and how discount brokerages are changing the market ... Read Answer >>
  4. How can I purchase stocks directly from a company?

    There are a few circumstances in which a person can buy stock directly from a company. The following is meant to cover some ... Read Answer >>
  5. What's the smallest number of shares of stock that I can buy?

    The answer to this question is not as straightforward as it seems. Many people would say that the smallest number of shares ... Read Answer >>
  6. Is a Canadian resident allowed to participate in a direct stock purchase plan from ...

    There is no law that prevents Canadians from participating in direct stock purchase plans offered by U.S. companies. There ... Read Answer >>

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