So you don�t have enough money to buy a hundred shares of stock. Don�t worry there are ways of buying stock without having thousands of dollars. Many of you have probably seen ads for online accounts or day trade accounts with trades as low as $7. However these accounts have minimums of $1,000 or more. I have found two other options for small investors who want to buy stock 1) If you like to trade online, there is a site that has a minimum account requirement of only $20 and open market trades only cost $3. You are probably thinking there is a catch. The website is call buyandhold.com, and it offers thousands of stocks to chose from. The way that buyandhold keeps their trade prices so low is that they only invest two times a day. So let�s say that Jon places an order to buy at 8:00 AM to buy $20 of AOL. Buyandhold will execute his transaction along with all morning transaction at one time, let�s say 9:30. So Jon will get AOL at the 9:30 price. BuyandHold invests once in the morning around 10:00 and once in the afternoon at 2:00. If an investor makes regular purchases over a period of time the price of one day�s trade won�t matter (refer to Dollar-Cost Averaging). Another nice feature of investing this way is that one can purchase fractions of shares, instead of having to invest in 50 or 100 shares at a time. CBS also has a similar website on their webpage. I highly recommend them both. So if you think you see the next Mircosoft in the market but don�t have much money, go online to buyorhold or similar websites and start investing regulatory and you could be the next Bill Gates. 2) One of the most efficient ways for new investors to buy and accumulate shares is to purchase shares through a DRIP program. DRIP stands for direct reinvestment plan. Thousands of companies have set-up a way for investors to purchase shares directly through their company. Since one buys shares direct and without a broker there are little commissions or charges when purchasing shares. There are some drawbacks in purchasing stock this way. For example most companies will only invest your money once a month and they can recall your shares at anytime. I have personally used this way of investing and brought my first shares of stocks through it. This way of investing has been around for years, but sadly nobody takes advantage of it. This is also another to dollar cost average your stocks. Dollar cost averaging through a broker would take you through the cleaners. I hope you as the investor sees the value in DRIPs for long term investing. |