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| Leighla |
 Posted: Wed Feb 23, 2005 6:01 am Post subject: Have you tried No Load Stocks? |
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Investing Associate
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| I like not having to use a broker and not having the fees. Anyone else tried the No Load Stocks? |
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| pride |
| Posted: Wed Feb 23, 2005 7:22 am Post subject: |
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Investing Associate
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I've never heard stocks called "no load stocks" before. I believe you mean purchasing a stock without a sales fee. I have never heard of doing that either, you always need a platform on which to buy a stock (ie:ML, MS, Schwabb). There are, however, discounter brokers such as e-trade and ameritrade that allow you to purchase stocks at a discounted fee.
The term no load usually refers to a mutual fund which does not carry a sales charge. If you go to a merril broker, he works on commission... not just of how much money he brings in, but where he invests it. If the broker invests your money in a money market fund, the commission he gets would be substantially less in most cases than if that broker were to invest your money in a loaded mutual fund. |
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| Leighla |
| Posted: Wed Feb 23, 2005 1:48 pm Post subject: |
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Investing Associate
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| pride |
| Posted: Wed Feb 23, 2005 4:40 pm Post subject: |
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Investing Associate
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| Ahh ok I know what you are talking about now. Also, along the same lines, there is an investment called drips. I think this is the same thing. Direct reinvestment.... something or other. I'll look it up and repost. Good catch though! |
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| Leighla |
| Posted: Wed Feb 23, 2005 4:50 pm Post subject: |
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Investing Associate
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No, DRIP is something altogether different. A DRIP is a Dividend Reinvestment Plan.
You CAN purchase a No Load Stock through a company and have it allocated as a DRIP. The transactions are independent of each other entirely.
I can allocate a DRIP from a purchase with a broker.
I can allocate a DRIP from a No Load Stock purchase through a company. |
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| pride |
| Posted: Thu Feb 24, 2005 5:55 am Post subject: |
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Investing Associate
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| Yes thank you for the refresher! I've heard of having a DRIP with the firm issuing the dividend in the first place, that way you do not have the brokers fees for purchasing more shares and/or managing your money. That's why I was coupling it with the "no load stocks". One thing I'd like to ask you regarding these, what type of price per share can you get on these no load stocks? Do they give you the exact price it is on the exchange at the time of purchase? Or do they do something like give you the previous night's closing price? |
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| Leighla |
| Posted: Fri Feb 25, 2005 7:52 am Post subject: |
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Investing Associate
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Hi Pride,
I'm sure you know that not all companies offer DRIPs. It is nice when you come across a company of interest that has one.
Not all companies that participate in No Load Stocks offer DRIP just as not all companies that you purchase from a broker offer DRIP. I don't want anyone reading this thread to be confused and think if they purchase a No Load Stock they will be eligible for a DRIP. It doesn't work that way. No Load Stock is just a term for a purchase transaction.
Setting up a DRIP doesn't have anything to do with how you go about making your initial purchase. It's a matter of whether the company has it to offer in the first place.
The DRIP is a benefit because you accumulate more stock through reinvesting the dividends. And it enables you to purchase more stock from the company in the future.
The No Load Stock is a benefit because you forgo the transaction fees of a broker for the initial purchase of the stock and any stock you wish to purchase in the future.
I can understand how a person could confuse the two because the benefits are similar.
When you purchase stock through a No Load Stock process, the company will sell you the stock at the price it is on the market at the time of purchase. If memory serves me, the down side to the No Load Stock is
you write a letter to the company requesting the purchase and you are at the mercy of the US postal service as to when your request arrives. So you won't have "an up to the minute" stock price.
*Qualifier*
It's been years since I've used a No Load Stock. Some things may have changed over time. It worked well for me. I recommend it especially for blue chips. (I wouldn't use a No Load Stock purchase for a high risk or volatile stock.) For stock I plan to keep, I wouldn't hesitate to use it again. |
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