Buying Stocks Direct
By Jayme Hanson

Buying stocks direct also known as direct registration means that you purchase the stocks directly from blue-chip companies and in the process bypass the brokers and their fees. Buying stocks direct has advantages and disadvantages.

One advantage to buying stocks direct or a direct registration is that you are listed as the owner of the stock and not your broker. You will receive company correspondence directly from the issuing company and you will also be able to sell the stock without filling out the paperwork and waiting to mail in the forms. Before buying stocks direct, research the stock to determine if it will fit your overall investment goals.

The biggest disadvantage is that you probably won’t be able to sell the shares immediately. Sales are sometimes handled

only once whether it is at the end of the day, or the week or possibly even the month when buying shares directly from a company. Because of this, it is likely that the stock price will change between the time you decide to sell and when your shares are actually sold. You could also contact the company you purchased the stocks from and ask them to transmit your shares to your broker. This is usually fairly quick but can take up to a couple of days.

Another big disadvantage to buying stocks direct is that not all companies allow direct ownership purchases. It is estimated that only about 60% of listed securities offer direct registration. If you limit your investing to only companies that offer direct registration you could be missing out on some promising investments.