Often I meet with one question from beginners - How can I quickly buy stocks? And if possible, without paperwork with the paperwork with a broker. After all, if you suddenly decide that you want to become an investor and start buying stocks in your portfolio, it turns out that you will have to spend time processing all the formalities and opening an account with a broker. And if you don’t want to wait or not? What to do in this case?
I will answer right away. There are options, but you probably won't like them. Below I will tell you all the pros and cons of ways to quickly buy stocks without signing a contract with a broker.
But first, let's see, why do we need a broker? Maybe it's just an intermediary and a reseller, without whom you can safely do?
Who is a broker?
So who is a broker? A broker is a legal entity that is a professional participant in the securities market. He has the right to carry out operations with securities both on behalf of the client and on his own behalf.
I will mark it separately! A legal entity entitled to buy and sell securities on behalf of a client! Naturally, to have this right, you need to get permission from the client.
That is, without a written agreement, officially drawn up and certified by signatures and stamps, this will not work.
You can buy and sell securities both on the regulated market - the exchange, and simply from the hands of other owners. And if you can buy without a broker, you cannot go to the exchange as an individual, since you are not a professional bidder. Therefore, here you can’t do without a broker.
Well, if you are “on fire” and you need to buy stocks today without waiting for the signing of an agreement with a broker? What to do?!
How can I quickly buy stocks without a broker?
As I said, there are options! But each of them has its own "pitfall".
Let's look at these options:
- buy stocks from a forex broker.
Indeed, to start trading with a forex currency broker is simple - created an account, threw money in one of a dozen ways and that’s it! Trade! The truth is in this case you are buying not just a piece of stock, but with a shoulder and a decent package! In addition, the list of stocks is very small, only the most popular. And yet, in fact, you do not have any rights to the acquired shares. Indeed, in reality, you are not buying the shares themselves, but a synthetic product (the broker's obligations to pay you profit if the share price goes up, and you undertake to pay the broker yourself if the share price goes down). It should be immediately understood that this is just a speculative purchase, but not a long-term investment!
- Buy shares directly from another owner.
A good option for few liquid stocks and those that are not traded on the stock exchange. But if the package that you want to purchase is less than a few hundred thousand rubles, then it may very well turn out that other expenses (transportation, accommodation, etc.) will turn out to be very large! In addition, seller’s dishonesty risks arise. If you do not understand this, then it is better not to risk it.
- buy shares from the issuer’s company itself.
The option is similar to the previous one with the only difference that you buy shares from the company itself. The risks that you are "cheated" are many times less, but it is unlikely that anyone will bother with a small package. In addition, rarely do any of the issuers directly trade their shares. The majority, either displays shares on the stock exchange, or distribute among their workers in the form of bonuses. That is, you have to either go for shares on the stock exchange or to the employees of the organization (see the previous paragraph.).
Some banks have this service for customers. True, there are a lot of restrictions. This offers a very small number of banks and a very narrow list of shares for purchase (only the most liquid). In addition, banks often have very large spreads for buying and selling. So it’s unlikely that the course will suit you. Alternatively, you can buy units of a mutual fund in the bank containing the shares you need, but in this case you completely trust your money to the fund manager. It will be he who will decide on the purchase and sale, as well as the shares between the shares in the portfolio. It is possible that this will not coincide with your point of view and your goals.
Let's summarize in comparing all the ways to quickly buy stocks.
As you saw, all the tools I presented have big disadvantages. Or you will not be the direct owner of the shares (forex brokers and mutual funds), that is, in case of any problems you will not be able to prove that you are the owner. Also in this case, you will be ordered the path to the meeting of shareholders and the right to vote.
In almost all of the cases proposed, commissions and other acquisition costs gobble up most of the revenue. So, for example, mutual funds will annually charge you a management fee. A personal purchase of shares will require you to fork out for a trip to another city for paperwork.
In addition, for small blocks of shares that are usually acquired by novice investors, some methods are not available at all. I assure you, no one will bother with you for the sake of selling a package of 10,000 rubles!
Plus, let's remember our goal - quickly buy stocks! It is fast! The option of personal purchase of shares from the company of the issuer or from another owner, even in the best case, will take you several days. During this time, in fact, you can easily conclude a contract with a broker and fully purchase shares on the stock exchange.
It turns out that there are options to quickly buy stocks, but the broker does not have a real alternative to opening an account.
So I advise all newcomers not to bother with obscure ways to buy shares, but just boldly go to a broker and conclude an agreement!
The only thing I advise before this is to compare brokers located in your city with each other. Everyone has different commissions, different services offered and different minimum amounts. On this topic, you can read the article on this blog - Brokerage depository service.
For the most trusted newcomers, I’ll say the last thing. Do not fall for the various offers of near-market swindlers! Do not conclude an agreement and transfer money to those who promise you guaranteed profit! All self-respecting brokerage companies never stutter on guaranteed profits! Moreover, they always warn that stocks are a risk tool! That is, you can get not only profit, but also loss.
Well, if someone is combing you about 100% profit, and even without any risks, then either he himself does not understand what he is selling or deliberately misleads you. Be afraid of these!
How to trade on the exchange without a broker? (Jul 2019).
Although there is no doubt that the most popular way to buy and sell investments is to open a brokerage account, many new investors ask me how to buy shares without a broker. For those of you who want to take this path to business ownership, you can do this with varying degrees of success - there is no requirement that you work with a broker to invest in stocks or mutual funds, especially stock funds.
Direct investment offers some advantages and disadvantages that you will need to weigh depending on your personal situation, but my goal in describing how this works is to provide you with an overview so that you have the best pen on how to invest without a broker to by the time you finish reading. You still need to decide whether this approach is suitable for you, given your unique circumstances and preferences.
1. You can buy shares without a broker by investing in shares through a plan to purchase direct shares of the company
The first and often easiest way to buy stock without a broker is when companies, often blue-chip, sponsor a special type of program called DSPP or Direct Stock Sales Plan. These plans were originally conceived by generations ago as a way for businesses to allow smaller investors to buy property directly from the company, working through a transfer agent or plan administrator responsible for processing daily documents and transactions.
Most plans will allow investors to buy stocks without a broker if they agree to either have a reasonable amount that they take from their verification or savings every month for six months (often $ 50 is an acceptable minimum) or they make a one-time purchase, often 250 or 500 US dollars.
Typically, plan administrators collect cash from those involved in a direct stock purchase course and use it to buy company shares, either on the open market or just released from the business itself, at predetermined times.
The average purchase price is weighted or some other methodology is used to equalize the value among investors with shares placed on each owner’s account. In the same way as you receive a report from a bank, in a report on plans for the purchase of direct shares it is received in most cases quarterly, indicating the number of shares owned by you, any dividends received by you, and any purchases or sales that you made,
Some direct share purchase plans do no commission. Others charge small commissions, often $ 1 or $ 2 plus a few cents per share, for each purchase and a large fee, perhaps $ 15 plus a few cents per share for sale. They are much lower than what you pay for a full-service broker.
2. You can buy shares without a broker, taking advantage of the dividend reinvestment program to add additional shares to your holdings.
The next best way to buy stocks without a broker is to participate in a stock dividend refinancing program or in DRIP. I have shared with you some of the reasons why you should invest through DRIP, but it would be useful to review them here so that you understand the appeal. DRIPs allow you to receive cash dividends paid by your company and plow them back to purchase additional shares, charging either a nominal fee or nothing at all, depending on the specifics of an individual plan.
For a typical stock that can pay dividends four times a year, this is a lot of transactions for 25 or 50 years, for which you do not pay commissions. (In the United States, some brokers traditionally reinvest dividends on certain issues at no cost to clients, so if you are fortunate enough to have such an arrangement, buying shares without a broker does not have such an appeal.)
Dividends reinvestment programs are often combined with cash investment options that resemble direct share purchase plans, so you can regularly receive money withdrawn from your checking or savings account, or send one-time payments when you want, maybe just $ 25, buying more stocks in the business because you can purchase something from a mail order catalog. In fact, when I taught you how to make a UTMA gift, I gave you the opportunity to look at the past of my family by buying shares without a broker, as we are gifted with my little sister $ 12, 948. 10 costs Coca-Cola shares.
Many long-term investors have become adept at creating wealth through these types of accounts, buying stocks without a broker for years, even decades, wipers who left behind $ 8 million or retired old women who raised more than $ 34 million in 2016 as purchasing power from their tiny apartments.
3. You can buy shares without a broker by purchasing a single share through a specialized gift service
Until recently, you could use companies that allowed you to buy one share of the shares to get your name on the list of shareholders of the company, and then register in closed plans for direct sale of shares or reinvestment plans for dividends that prohibit outsiders who do not yet own shares. Unfortunately, in the decision of the financial industry to refuse paper certificates, this has become almost unacceptable. To take advantage of this, you will need to pay the stockbroker $ 250 or $ 500 for the so-called "inconvenience fee" to issue a paper certificate. Instead, you'd better buy stocks through a brokerage account and use it under a direct registration system. The problem is that this requires a broker.
This is one of those areas where the rich have an edge over everyone else. If a wealthy investor has a relationship with an asset management company, he or she is likely to get a registered investment adviser so that one of the firm's institutional brokers places the deal on behalf of the client and then gives the member a gift to the child or family through DRS. or another recipient of capital will now be able to buy shares without a broker in this particular business, providing access to those who could do this with ease.
Final thoughts on buying stocks directly without a brokerage account
These days there is no reason not to open a brokerage account. Those of you who are worried about risky risk should choose to open an invoice for cash only and not for a margin account. Make sure you are covered by SIPC. If you are smart about the company you work with and buy ordinary ordinary ordinary shares, you can probably leave with trading expenses and commissions for a smaller trip to your favorite cafe.
The balance does not provide tax, investment or financial services and recommendations. The information is presented without taking into account investment objectives, risk tolerance or financial circumstances of any particular investor and may be unacceptable to all investors. Past performance does not indicate future results. Investing involves risk, including the possible loss of principal.
Where to buy shares for an individual
The easiest way to purchase securities of any issuer is to apply to the exchange. To do this, find broker – intermediarywho is professionally engaged in the market.
An individual cannot independently work on the exchange, only through a broker.
Don't think it's some kind of discrimination to individuals, legal entities, with the exception of the brokers and banks themselves, also work only through brokers. In fact, no one can simply buy shares directly on the exchange, since this is a complex process that needs to be regulated, and for this the brokers came up with the idea that they could throw off the whole process of buying / selling shares on them.
For a complete understanding, where to buy stocks, now we will tell you a little confusing things, and then how easy it is to get around them and where to buy stocks. This is necessary so that you understand why this is happening, and not otherwise.
If you are looking for where to buy stocks Campari (alcoholic drinks) or company stock Adobe (everyone knows photoshop), then you should know about the difference between brokers.
It all starts with exchanges - basically, American companies are traded on American exchanges and are quoted in dollars, European companies are listed on European exchanges and turn to Euro, Russian companies are listed on Russian exchanges and traded in rubles and so on. The fact is that brokers work in different ways - someone works only with American exchanges, someone works only with Russian or even with one Moscow exchange.
- Therefore, we will only look for brokers that work with all leading world exchanges.
There are also nuances, for example, you want to buy shares on the American and Moscow exchanges, and even then on German. For this you need to have a broker three separate currency accounts for each exchange individually and, accordingly, 3 different bank currency accounts (dollars, rubles, euros) But in recent years, brokers began to create single accountsfrom which you can buy shares on all exchanges, in all markets, including commodity ones.
- Therefore, we will look for brokers with single accounts for convenience and lower costs for translation commissions, etc.
Why do we talk so much about brokers?
Because it is the only intermediary between the exchange and the client where you can buy shares, or rather give a purchase order. A broker on his own behalf buys stocks for you and writes your data to all the necessary places - this is the register of the company itself (the shares of which you buy) on the exchange, the central depository - where your credentials are kept and the broker's depository - your data is with the broker himself.
That is, you can buy shares from one broker and sell through another, as the shares are not stored with your broker, but in the central depository - a special organization that stores data on all shareholders, also in the register of the company itself. Именно такой порядок не позволяет брокеру проводить мошеннические операции и подтверждает его изначальную суть посредника.
После открытия брокерского счета инвестор может заняться анализом и понять, что в большей мере его интересует: фиксированный дивидендный доход или вложение, нацеленное на то, чтобы купить дешевле, а продать дороже. Разобравшись с этим вопросом, человек может подать заявку на покупку тремя способами:
- Первый из них — самый древний. Он заключается в подаче письменного поручения directly to the broker.
- The second method is also ancient today, today almost nobody uses it either. Application is submitted by phone - you call the broker and say - I want to buy such and such stocks and so much. The broker at the other end of the wire carries out the client's order.
- The third method is the most common. After opening an account, the client receives trading terminal. Then he is able to independently submit an application on the market through his computer or smartphone - in fact, this is what the broker does when applying for by phone, only here the investor does it himself. The convenience is that the trading terminal allows you to instantly make decisions, monitor charts, profitability, account status and fully control the entire process.
As you can see, a broker is the most convenient place where everyone can buy shares. You can register with a broker on the Internet, as well as replenish your account, all this takes minutes, but gives access to the whole world for many years.
Below we can show an example of buying CFDs on stocks with a FinmaxFX broker. We selected Caterpillar stocks and clicked on a button BUY:
A little later, the stock went up in price and thanks to leverage, we made good profit:
To fix the profit and get it in our account, you need to close the deal, that is, sell the shares back:
The results of the transaction can be seen on the same page of the trading platform on the tab Deals:
By purchasing securities, a person becomes a full-fledged participant in the business and gets the right to vote in shareholders meetings, to resolve issues related to the management of the company. Along with this, the owner of the shares receives dividends - a part of the company's profit proportional to his share in the capital. The more shares a shareholder has, the more he can influence the enterprise.
It is fair to say that most corporations place for public trading no more than 20% of all shares so as not to lose ownership and decisive voting rights.
Best stock brokers
FinmaxFX broker offers a huge number of stocks. Most brokers seek to give access only to the most popular NYSE or NASDAQ, but FinmaxFX has a huge number of European and Asian stocks, a large number of indexes, and of course, securities from US exchanges, including domestic companies. The broker provides a professional trading platform and the best conditions.
Adjustable FSA and in Russia TSROFR. Recommended Initial Deposit $250-300.
Libertex platform is owned by a broker who has been working for more than 20 years. The platform itself is under the control of European regulators Cysec and Mifid. Here you will find a huge number of stocks, stock indexes, ETF funds and more.
The broker offers a huge asset base, an academy (training programs), constantly holds webinars, provides analytics and has a very convenient trading platform to which a large number of indicators are connected. The platform itself has a block with the latest news and forecasts in Russian. Minimum deposit $200.
The eToro broker offers a huge number of stocks and ETFs in the US, European and Asian markets. More than 12 years of experience, regulation of CySEC, investment funds in the stock market, ready-made portfolios and other investment opportunities. Professional broker for buying and making money on securities. Minimum deposit $500.
How to buy stocks without a broker
The purchase of shares without a broker implies that the transaction will be conducted outside the stock exchange. Initially, the shares are either at the depository or at the registrar. If a person wants to buy shares without a broker, then in this case there are several ways.
Where to buy stocks without a broker
First, the investor can find private personthat already owns securities. If his shares are held by the registrar, then it is necessary to find a suitable depository with suitable tariffs (the storage of securities in most cases involves certain costs). After that is contract of sale and a deal is drawn up. These securities are transferred to the registrar, and he sends the securities to the buyer's depositary account after the transfer of funds. The paper price will be negotiable.
In the case when the seller’s shares are already in the depository, the process is simplified, and in fact the depository will simply change the owner of the package of securities after the transaction.
Some issuers sell their shares directly in production. Thus, you can contact the special department of the corporation, which is engaged in the distribution of shares.
- It should be noted that most often the issuer overpays heavily.
If the shares are traded on an exchange, it is on the exchange that the most favorable rate will be.
Since you already know where to buy stocks, the important question will remain how much money is needed for this, and how to make money on stocks. Of course, in many respects this will depend on your capital, for example, 50% of profit from $ 500 or from $ 50,000 will be a big difference.
The value of shares also varies greatly, they can cost cents or, like Berkshire Hathaway shares, at 200 thousand dollars per share.
The investor should know that all modern stocks exist in electronic form and do not have a physical medium. Therefore, you should not expect that after the transaction you will put beautiful pieces of paper with monograms and ribbons in your portfolio. In general, the purchase of shares in the 21st century does not constitute any problems. Any person, being the owner of capital, can make a profitable investment and increase his capital.
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