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Are you interested in investing in stocks, but unsure about how to get started without a broker? Over 50% of Americans do not invest in the stock market, the main reasons being a lack of knowledge and access to resources.
But you can buy stocks online without a broker, and it can be a great way to save money on fees and take control of your investments.
Below, we share some of the best and easiest ways to buy stocks online without an online broker so you can make an investment decision that aligns with your personal finance goals.
5 Ways to Buy Stocks Without a Broker Online
The thought of purchasing online stocks without the help of a broker may seem daunting at first, but we’ll give you five ways to confidently buy stocks online by yourself.
- Online brokerage account
- Retirement plans
- Direct stock purchase plans
- Dividend reinvestment plans
Online Brokerage Account
An online brokerage account is a digital platform that allows investors to buy and sell stocks, bonds, mutual funds and other securities. Brokerage firms typically offer these accounts, which you can access from a computer or mobile device.
You can also purchase stocks as part of your retirement plan. Some common retirement plans that allow you to invest in stocks include individual retirement accounts (IRAs), 401(k) plans, and simplified employee pension plans (SEPs).
By investing in stocks through a retirement plan, investors can benefit from potential long-term growth while also enjoying tax advantages and other benefits that are associated with retirement accounts.
Direct Stock Purchase Plans
A DSPP is a program that allows individuals to purchase stocks directly from a company without going through a broker. With a DSPP, you typically make small investments on a regular basis, meaning you gradually build a portfolio of stocks over time.
Some companies may also offer a discount on their stock price to investors who participate in their DSPP.
Dividend Reinvestment Plans
A dividend reinvestment plan (DRIP) allows investors to automatically reinvest their dividends into additional shares of a company’s stock rather than receive the dividends as cash payments.
When you enroll in a DRIP, any dividends you receive from the company are automatically used to purchase additional shares of the company’s stock at the current market price.
A robo-advisor is an online platform that provides automated investment management services to investors. These services are typically based on algorithms and computer programs that use several factors, such as an investor’s age, risk tolerance, and investment goals, to create and manage a portfolio of investments.
Benefits of Using a Broker to Buy Stocks
Using an online broker to buy or trade stocks can offer several benefits, including various brokerage services and personalized advice tailored to your individual financial goals and risk tolerance.
Brokers can also help with record-keeping and give you direct access to foreign stock exchanges, allowing for greater diversification in your investment portfolio.
Additionally, brokers can keep you updated on market trends and changes in laws that may affect your investments, providing valuable insights and guidance to help you make informed investment decisions.
Buying online stocks without a broker is possible through various methods such as direct stock purchase plans, dividend reinvestment plans and robo-advisors. These methods offer several advantages, such as lower fees, passive investing, and automated management.
It’s important to consider the potential drawbacks of each method and carefully evaluate your individual investment needs and goals. Start exploring your options today, and take the first step toward building a successful investment portfolio.
Need more information about buying stocks online without a broker? Check out these commonly asked questions below:
What is a stockbroker?
A stockbroker is a licensed professional who buys and sells stocks on behalf of clients.
What is the easiest way to buy stocks online?
The easiest way to buy stocks online is through a brokerage account or investment app that offers online trading services.
How do beginners buy stocks without a broker?
Beginners can buy stocks without a broker by using direct stock purchase plans, dividend reinvestment plans or robo-advisors.
These options provide automated and low-cost ways to invest in stocks without the need for a traditional stock broker.