companies have adopted the Direct Stock
Plan (DSP) which allows individuals to buy and sell shares directly through
the company, bypassing brokerage firms and their fees. In many cases you can have the dividends you receive from the
company automatically reinvested into more shares through a Dividend
Reinvestment Plan (DRIP).
Direct Stock Plans (DSP): Some
companies allow you to purchase and sell stock directly through them without
having to pay commissions to a broker, although you may have to pay a small
fee for this service.
Some companies require that you
already own stock (at least one share) in the company or are employed by the
company before you can participate in their DSP. You may be
able to buy stock by investing fractional dollar amounts rather than having
to pay for an entire share. In some cases you could have an
account debited on a regular basis to make investments in the plan. Some
plans require a minimum amount of investment or require you to maintain
specific minimums in your account.
Each company that has DSP will explain
on their website all the requirements and what amount
they charge for the service- the fee charged is usually a fraction of the
cost a broker would charge.
DSP plans will not allow you to buy or sell your securities at a specific
price- they batch transactions and buy and sell shares at established
periods- weekly or monthly and normally at an average market price.
Dividend Reinvestment Plans (DRIP):
Dividend reinvestment plans let
you take advantage of reinvesting your dividend back into shares of the company
instead of receiving cash.
The rules and restrictions in these plans vary depending on the kind of plan
and the company offering the plan. Before you decide on DSP, read the company's
disclosure information (prospectus) to learn how its particular plan
works. The plan will tell you how to enroll, the number of shares needed to open
an account, any charges that may apply, and the minimum or maximum you can buy
or sell, the dates when you can invest, and how to withdraw, transfer, or sell
Most of the companies that have DSP have Internet sites that can provide you with
information about their plans or tell you who to contact for more information.
Some companies have assigned their transfer agent to administer the DSP.
There are literally hundreds
of well known companies that have DSP and DRIP investing plans that
will allow the individual investor to acquire their stock and to reinvest
To get you started, we have identified a few
well known companies that have DSP plans. These are not recommendations
to buy these stocks, but simply to acquaint you with the
process of DSP and DRIP programs.
Shareholder Investment Program Allows you to buy and sell their
stock and to reinvest dividends automatically.
stock purchase program is a DRIP that allows you to buy Intel shares if
you have at lease one share to begin with. Their DRIP program allows you to
reinvest dividends back into company shares.
Direct Stock Purchase Program allows shareholders of record and new
investors to acquire their common stock.
With a little research on your part, you can find these
companies on the Internet by searching for: direct stock purchase plans investor
DSP is a great way to invest in NYSE and NASDAQ companies and
save on transaction fees...
If you're a beginner in the stock market and would like a quick "101" on how
to invest in stocks and funds, check out the related article on
Introduction to investing for beginners.