Getting a Handle on DPPs, DRPs, and DCA . . . PDQ
In This Chapter
Buying stock directly from a company
Looking at dividend reinvestment plans
Using dollar cost averaging
Who says you must buy 100 shares of a stock to invest? And who says that you must buy your stock only from a broker? (There go the little voices in our heads. . . ). Can you buy direct instead? What if you only want to put your toe in the water and buy just one share for starters? Can you do that without paying through the nose for transaction costs, such as commissions?
The answer to these questions is that you can buy stocks directly (without a broker) and save money in the process. That’s what this chapter is about. In this chapter, we show you how direct purchase programs (DPPs) and dividend reinvestment plans (DRPs) make a lot of sense for long-term stock investors, and we show how you can do them on your own — no broker necessary. We also show you how to use the method of dollar cost averaging (DCA) to acquire stock, a technique that works for all stock investors. All these programs are well-suited for people who like to invest small sums of money and plan on doing so consistently in the same stock ...