How to Buy Stocks Online Without A Broker

Budgeting / By Humbled Budget

Humbled Budget Team

With over 55 years of combine experience in the Finance/Tax Industries based in the United States, Our Team of Humbled Individuals' shares their wisdom gained through experience or technical knowledge acquired through Additional Education.

Table of Contents

Introduction

You want to invest in stocks but don’t have a broker. Is this even possible? The answer is yes.

You can start investing without a broker by following these simple steps.

Decide to invest

Decide to invest. There’s a lot of money in the stock market, and it can be yours if you take the plunge. When you’re ready, we’ll show you how to start investing in stocks with just $500.

Determine how you want to buy the stock

Online brokerages are the most common way to invest in stock without a broker.

These companies allow you to buy and sell shares online, often at lower prices than full-service brokers, who charge commission fees each time they execute your trade.

However, some online brokers require that you hold a certain amount of money in your account before they’ll allow you to start buying stocks under a practice known as “minimum balance,” which can be frustrating if you’ve got just a few hundred dollars saved up and want to start investing immediately.

Direct stock purchase plans are another option for buying individual shares of publicly traded companies without using a traditional brokers.

These plans offer investors access to discounted trading commissions (sometimes even no commissions) while still allowing them to buy individual stock directly from the issuing company rather than through a middleman like an online brokerage firm or full-service stock brokerage firm.

They’re also riskier: When investing directly into company stock rather than through an intermediary like an online brokerage or investment advisory service, there’s less oversight on how those funds is invested and managed.

Choose the stocks you want to buy

Understand what you’re buying. It’s essential that you know a company’s fundamentals before investing in it, so read up on its products and services; how much it pays its employees, where it does business, etc.

If you don’t understand the business model well enough to explain it to someone else in simple terms, then maybe that’s not a good investment for you.

Choose stocks that are already part of your portfolio. Once you’ve decided, which store or stock look attractive based on the criteria above (or any other factors), consider adding them to an existing position rather than starting from scratch with new ones.

-This will help ensure there’s no duplication of holdings between different accounts or across multiple portfolios; otherwise, it can become confusing.

Pick stocks that interest your portfolio and yourself—if neither is true, don’t take any action yet.

Check the market conditions

The first thing you’ll want to do is check the market conditions. If there’s a lot of volatility, you may not have time for the long-term process required by this kind of investment.

You’ll also want to know what stock hot and which ones are are cooling off at the moment—that way, when it comes time for your money to be invested in something new, you’ll have some idea where it should go.

And if some companies or sectors seem poised for growth because of changing trends in technology or consumer spending habits, those will also be good places for your money.

It’s important not only because knowing about these things will help with making informed decisions about where and how much stock should go into each investment (more on this later) but also because knowing the market will help avoid making bad decisions based on incomplete information.

For instance, investing too heavily in one company when another looks like it might be better positioned overall (or vice versa).

Pay attention to fees and commissions

The two highest costs of investing are fees and commissions. Fees are a charge paid to the custodian of your account, while commissions come from your broker. They’re also called “commission” or “load” sometimes.

Fees are charged for buying and selling stocks, bonds and other securities on an exchange or over-the-counter market.

The amount varies by a brokers but is usually between $10-$20 per trade (or $30-$50 if you’re buying mutual funds). Commissions vary by type of stock:

Brokerages offer different types of accounts with varying levels of service

—and thus, different commission structures—so be sure to choose the one best suited for your needs.

Some brokers may offer free trades with certain accounts; others may offer discounted rates on specific types of investments (such as ETFs).

Consider a dollar-cost average strategy

The dollar-cost averaging strategy is famous for buying stocks without a brokers.

You can use it to invest regularly in your favourite companies or mutual funds, or you can use it to buy your initial investments.

Suppose you have $5000 and want to invest in Coca-Cola (KO). Instead of buying all the shares at once, you decide to invest the money over time so each purchase will be just a little smaller than the previous one.

If KO’s price stays constant at $50 per share, then each time you invest $500 at the end of five years, you’ll own 250 shares worth $25000 total.

In the event the price goes up during those five years, those shares will be worth even more when they’re fully mature.

Use stop-loss orders

Stop-loss orders are designed to limit your losses. If a stock drops below the set price, it will automatically sell the shares at that price.

-This can help you avoid a significant loss on an underperforming stock and give you peace of mind.

However, keep in mind that stop-loss orders are not guaranteed to work. For example, a sudden market drop could trigger more shares than expected sold due to other stop-losses being hit first—meaning yours gets executed before its trigger price is reached.

In addition, there’s always a chance that the exchange where your order was placed goes out of business or has technical issues before your order executes properly. If this happens before your order is triggered, then it won’t get executed.

If you have a little time and money, you can start investing in stocks without a brokers today

Suppose you’re a little worried about getting started. In fact, the process might not be so challenging with the availability of several resources if you can dedicate some time and money.

I’ll walk through the basics here—how much money you need to get started, how much time it takes, what costs are involved, and what kind of risks or benefits might be waiting for you once investment day arrives.

Conclusion

To summarize, buying stocks without a brokers is not complicated only requires some patience and research.

However, it does take time! You may spend more time researching your stock purchase than making it—which is part of why many people prefer using brokers instead.

If you have extra time on your hands and don’t mind doing some homework before investing in individual stock (or mutual funds), then you can save money by doing this yourself.