Buying Stocks
Now that you know more about stocks and some market fundamentals, how do you go about buying them? Fortunately, you don't need to shout out your order on the trading floor. There are 2 ways to buy stock:
1. Using a Brokerage
The most common way is through a broker. Brokerage firms are split into 2 categories:
- Discount brokers like Desjardins Online Brokerage provide a number of tools to help you manage your account yourself.
- Traditional brokers—also known as full-service brokers—offer expert advice and can manage your account for a fee. They can tailor their offer to suit your goals.
There was a time when only rich people could afford a broker because traditional brokers were the only option—and they were pricey. However, the number of online discount brokers has skyrocketed with the rise of internet. As a result, investing in the stock market is now more accessible.
2. DRIPs & DIPs
Dividend Reinvestment Plans (DRIPs) and Direct Investment Plans (DIPs) are plans by which individual companies, for a minimal cost, allow shareholders to purchase stock directly from the company. Drips are a great way to invest small amounts of money at regular intervals.