Your Guide To Buying Stocks Without A Broker

Thirty-two years ago, I wrote the first issue of DRIP Investor. When I survey the more than 32 years since that first issue, a lot has changed in DRIP (Dividend ReInvestment Plans) investing, much for the better. For example, in that first issue in 1992, there were less than 10 companies that permitted investors to buy their first share and every share of stock directly.

Today, the number of companies permitting initial purchases has grown to over 650 firms. There are a similar number of foreign stocks whose shares trade on U.S. exchanges that also allow U.S. investors to buy shares directly, the first share and every share. I'm not sure there was even one foreign company allowing U.S. investors to buy initial shares in 1992.

Today's DRIP plans certainly are quite robust from a service level. There are:

• DRIPs that have IRA options

• DRIPs with discounts

• DRIPs with borrowing features

• DRIPs with automatic investment programs via electronic debit of a bank account

• DRIPs that permit market orders

• DRIPs that permit online buys and sell.

Very few, if any, DRIPs provided these features 32 years ago. But perhaps the biggest takeaway from 32 years of DRIP investing is this: DRIP investing works.

The combination of long-term (one might even call it the much-maligned "buy-and-hold") investing, dividend reinvestment, dollar-cost averaging, and no-cost/low-cost investing is a powerful strategy for wealth creation. It worked for me, and it has worked for many of the investors who started with our Charter issue 32 years ago and are still with us today! Click to view sample issue.

The big question, of course, is whether investors can make money in the stock market going forward, and whether they can make money the "old-fashioned" way — buying and holding quality stocks, reinvesting dividends, using price declines to accumulate more shares, and pinching their pennies when it comes to transaction costs. If you ask me, the answer is unequivocally "yes."

DRIP Investor Picks Stocks That Go Up!

My Editor's Portfolio in the first issue of DRIP Investor consisted of six stocks. All but Browning-Ferris (which was aquired in 1999) remain in my portfolio. Check out how these remaining five stocks have performed (all prices are adjusted for stock splits):

Will our selection process work for you? See for yourself!

Stock 8/3/1992 7/12/2024 % Gain
Bristol-Myers Squibb $17.65 $40.44 129%
Exxon Mobil $16.06 $113.27 605%
PepsiCo $18.69 $166.38 790%
Procter & Gamble $12.69 $166.61 1,213%
Walgreens Boots Alliance $4.45 $11.50 158%

And these numbers don't reflect dividends that were reinvested or the fact that I owned and accumulated shares over the years in a very cost-friendly way via DRIPs. Those are crucial points to understand.

You need to see for yourself! Subscribe to DRIP Investor today.

Charles B. Carlson, CFA
Editor, DRIP Investor