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How to buy a stock?
As, it is explained about meaning of stocks and principles & forces of stock market, it is the time to know how to buy stocks? You donít have to scare from the chaos of the trading floors, as an investor you are not supposed to personally go to the trading floor. You can buy stocks from any of the two ways:
It is the most accepted way of buying stocks. There two types of brokerage to choose from: full service & discount service. The former type of brokerage takes all of the responsibilities of your account, but their service charge is higher; the latter provides limited services to your account but is cheaper in comparison. There was a time when only full service brokerage was there that charged heavy service charges and were out of the reach of small investors. But, with the advent of Internet there came the flood of discounted brokerage as a relief for the small investors.
Dividend Reinvestment Plans (DRIPs) and Direct Investment Plans (DIPs)→
These plans allow the investors to purchase their stocks directly from the stock releasing companies and drawing the stock prices to a lower level. So, if you plan to invest small sum of money at regular intervals, the DRIPS is a great plan to follow.
With the purchase of stocks you get the right to vote for the companyís policies and also have the limited ownership on the assets as well as on the earnings of the company.