With the ability to buy fractional shares is very attractive, especially for investors just starting out. You can invest with a much more modest amount of money, and with some stocks selling for thousands of dollars per share, you can buy what you can afford. With this feature it’s much easier to use dollar–cost averaging.
With dividend reinvestment plans you’re able to purchase only the stock that made the payout, and no other. Of course, now with no trading commissions at all the major online brokerages you can reinvest the cash yourself with no extra cost.
Through a stockbroker, you can open a brokerage account a specialized financial account designed to hold investments and cash. The term is often used interchangeably with" brokerage," which is technically the name for a business.
When you want to buy stock in a company, you can't simply call up the company and buy shares, and you can't just walk into your local bank and invest. You need a specialized brokerage account, and that's where stock brokers come in. Some of the information a broker will likely ask you to provide will include:
* YOUR NAME
*SOCIAL SECURITY NUMBER
(or taxpayer identification number)
* YOUR ADDRESS
* TELEPHONE NUMBER
* E–MAIL ADDRESS
* YOUR DATE OF BIRTH
* DRIVER'S LICENSE, PASSPORT
(or information from other government–issued identification)
Additional information might include:
* BANK NAME & LOCATION
* BANK ACCOUNT NUMBER
* SWIFT CODE NO#
(this maybe used to transfer funds from your brokerage account to your bank)