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Q: How to Buy a Stock ( Answered,   3 Comments )
Subject: How to Buy a Stock
Category: Business and Money > Finance
Asked by: katieg123-ga
List Price: $2.00
Posted: 24 Jul 2002 17:50 PDT
Expires: 23 Aug 2002 17:50 PDT
Question ID: 44809
Hi -- I am an English graduate student and thus have no wisdom about
real-life money matters. I also know that the stock market is not
doing so well, but still, I am interested in trying out investing. How
do I begin with, say, $100.00? Perhaps I will invest more in time --
just want to try and learn! Thank you!
Subject: Re: How to Buy a Stock
Answered By: wengland-ga on 25 Jul 2002 06:57 PDT

I, too, am in the same position - only a couple hundred dollars to
invest, but I'd like to see if I can make a bit of money.

First step:  Head over to the Motley Fool website.  They seem to have
the clearest, least biased, most useful information.

You'll want to learn some of the basic terminiology and ideas on how
to pick a stock.  The idea when picking a stock is to find one that is
undervalued, with good financial structure and a potential to have
signifigant growth.  The Fool's School walks thru all this and more

Next, since you have $100 to invest, there are a couple of of options.
 One is a discount brokerage. is an option -
they allow you to open an account with any amount, but do charge $12
per trade, last time I looked, and $15 per quarter that you have less
than $1,000 in your account.  With only $100 to invest, almost any
brokerage account is going to eat up any profits with their fees.

A second option is the Dividend Reinvestment Program, or DRIP.  
Companies offer DRPs as a way for their shareholders to buy stock
directly from the company (usually through a transfer agent) in very
small to large amounts, and usually on a monthly basis if desired.
These plans get their name from the fact that they also reinvest
dividends paid, using these dividends to purchase more stock.

This offers a way to get into the market with very little capital, and
to avoid the brokerage fees.  However, it does not let you play 'day
trader', hoping to make a buck on small daily movements of the stock. 
Rather, it encorages you to buy and hold the stock, working on the
premise that the companys value will increase over time.

Again, the Motley Fool has a good explanation of DRIPs at:

Your best asset in this chase is going to be knowledge, not money. 
With a smart plan, and a few dollars each month, you can actually make
something of it.

If you want to buy several stocks, not all of them DRIPs, I suggest -- they have a low $4 transaction fee, with no
monthly fees at all.  Like buyandhold, mentioned by gw below, they are
not for 'day traders', but rather for people like yourself, who wish
to purchase some stock without a great deal of capital outlay.

Good luck and good stock hunting!

Search Strategy:
motley fool

Subject: Re: How to Buy a Stock
From: gw-ga on 24 Jul 2002 18:02 PDT
The most economical way to invest a small sum of money would be to
open an account with Buy and Hold (  They have
several plans--one is $15 per month with unlimited trades, or $7 per
month for two trades and $3 for each additional trade.

The only difference between Buy and Hold and other brokerage firms, is
that B&H pools together everyone's buy and sell orders and executes
them only three times per day, to save on overhead expenses.  Through
B&H you can buy and sell shares of some 4,200 companies' stock.
Subject: Re: How to Buy a Stock
From: expertlaw-ga on 24 Jul 2002 18:10 PDT
There are investment companies that will allow you to start investing
with as little as $50/month. The best thing to do is probably to
figure out what you can afford to invest per month, and start putting
that amount into mutual funds - although you should ask up front about
fees. If you try to engage in the trading of individual stocks, as
gw-ga's comment suggests, the fees can eat you alive if you are
investing small amounts. If your college has a credit union, you may
wish to check with it to see if it has a program for students who wish
to start investing.
Subject: Re: How to Buy a Stock
From: stockzguy-ga on 25 Jul 2002 22:14 PDT
HI Katieg123, first, although I've been investing many years, my best
bought stocks have been through a dividend reinvestment plan. I wish
google would let me post an email link, but that's against policy.
First I  really have not liked the Motley fool site since the
beginning. OK, dividend investing WITHOUT a broker, or a website that
charges you to purchase YOUR dividend shares. There are over 900 US
and foreign (US Depository shares) major companies that allow you to
purchase DIRECTLY from them, shares for a dividend reinvestment plan.
Some have a minimum purchase. Some require you to own at least one
share. I don't like the fact that any site charges you a fee to
purchase shares. You'll be better off buying directly from a major US
company, thereby avoiding fees. Although some charge a setup fee. If
you went thru and did buy 10 stocks, that's 40 bucks.
Some companies will allow you to directly purchase with a minimum of
$25,100, to 250 and up to 500 dollars. I like the bamk stocks, great %
dividend payout, here's one
 If you are unable to open a brokerage account, ask a parent or
relative to buy the stock for you and have the certificate put in your
name, they may forgo asking you for the transaction fees, I know I
would. I know how tough it was when I first started investing. The
link I gave you lists ALL the major comps with a DRiP. Good luck and
hope you can get started soon. Btw, a great read "Investing For

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