• What is a Stock?
• Buying And Trading Stocks
• Buying Stocks Directly from Companies
• Buying Stocks at Work
A stock represents shares of ownership in a company. Anyone who owns a part of ownership in a business is called a shareholder or a stockholder. As a shareholder, you will receive a stock certificate that shows you own a piece of a company.
Buying And Trading Stocks
Buying and selling stocks are at the center of trading stocks. As an individual investor, you can buy and trade stocks in two ways. You can purchase stocks either directly from the issuer at the face value without a middle-man (on the primary market) or from the public companies listed on the stock exchange through financial intermediaries (on the secondary market).
Buying Stocks Directly from Companies
As an individual investor, you can directly buy stocks of a company through dividend reinvestment plans (DRIPs) or via direct stock purchase plans (DSPs).
Several corporations offer dividend reinvestment plans (DRIPs) that allow existing stockholders to automatically get their dividends in shares. Other companies offer direct stock purchase plans (DSPs) that let small investors (not necessary a shareholder) buy stocks directly from them with a small service fee and some of them will offer this service without a commission.
Many corporations that form the Dow 30 list offer DRIPs. The list of DRPs stocks can be found at http://dripcentral.com/
Buying Stocks at Work
A number of corporations offer Employee Stock Ownership Plans (ESOPs) that allow their employees to invest in the company's stocks. Check with your human resource officer to see if your company has such plan.
This concludes our introduction to buying and trading stocks. As a beginner investor, before investing your money in any stocks you should research the company in light of your techniques for investing in the stock market.