Recently I discovered a means of investing directly in companies where you’d like to invest regularly. Doing so allows you to by-pass brokerage fees associated with buying/selling stocks. There are many advantages to investing this way vs. using brokers:
1. Lower fees. If you’re a small investor who want’s to invest regularly you’ll have to deal with brokerage fees. Granted that many discount brokerages have lowered fees but if you’re investing in a spread of individual socks these can add up quickly. After the initial enrollment into a company there generally no fees to buy additional shares into those companies. In some case there may be but this is a nominal amount that will certainly be lower than what even the best discount brokerage is offering.
2. You can invest a in fractions of shares for example. If you want to buy McDonalds (MCD) currently valued at around $100 but only had $50 to invest you can get 0.5 of a share in MCD. This wouldn’t otherwise be possible if you were attempting to do the same thing though a broker.
The easiest way to get into DRIPS and start investing directly is though http://www.directinvesting.com which I’ve just started using myself and would recommend onto others in a similar situation.
Note: I discovered an unfortunate downside to this service after having deposited $100 for full access to their services and to be eligible for what’s called “Club Enrollment their discounted service of $30 per enrollment of line of stock vs. $60. Anyways as I don’t have a US checking account allowing me to cut checks that the only options to fun the account are bank draft (rather inconvenient for me). Hopefully they’ll introduce payment by wire transfer at some point in the near future but as for right now they do not offer wire transfers as a means of paying.