Buying Stocks and Shares

These days, traders no longer have to jump into the trading pit, and yell out their orders to get them processed. There are two main methods of purchasing a stock: Via a broker, or DRIPS and DIPS.

Via a Broker.

This is the most common method of acquiring stocks. Brokers can be a full-service brokerage, or a discount brokerage. Discount brokers are cheaper, and mainly just facilitate the buying and selling of stocks. A full-service broker offers expert advice, manage your accounts, and also charge a hefty fee.

Previously, only people with lots of money could afford brokers, as the only ones available were the full-service brokers. Today, the power of the internet has enabled multitudes of online discount brokers to operate. This also paves the way for almost anyone to trade stocks in the market.

DRIPS and DIPS

A DRIP is a Dividend reinvestment plan. A DIP is a direct investment plan. They are plans where individual companies allow traders to purchase shares directly from them, and at a minimal cost. DRIPS are mainly used for investing small sums of money at regular time intervals.