Ask the Fool

Buying stock

Q: Is it true that you can buy shares of stock directly from companies instead of through a brokerage? — H.C., Watertown, Wisconsin

A: Yup. While you can own stocks in brokerage accounts and through mutual funds, many companies also let you buy their shares directly. You can do this using Dividend Reinvestment Plans (sometimes called “DRIPs”), Direct Stock Purchase Plans (DSPPs) or other methods. These plans generally let you spend small sums on stock, charge low or no fees and often allow you to reinvest dividends in additional shares or fractions of shares (though reinvested shares can require extra record-keeping).