Benefits Of A Monthly Investment Plan

by David Jenyns on September 28, 2009

One of the simplest, most effective, and most popular methods of buying stock is to start a Monthly Investment Plan, or MIP. Instead of having the price of the stock desired determine the amount of money that must be invested, MIP permits the amount of money available for investment to determine the amount of stock bought.

The would-be investor, first of all, may go to a New York Stock Exchange member broker, any of whom may service an MIP account. MIP investors pay only the usual brokerage fees, which, for the sake of convenience, are deducted from his payments.

Over the years, General Motors has emerged as the favorite MIP stock. It is being bought by some 4,500 MIP investors.

It is possible in ordinary stock-exchange dealings to buy an odd lot of as little as one share. It is possible to spend no more than $40 and acquire 10 shares of a stock selling at three. But in no way except through the MIP can an investor buy fractional shares and accumulate stock costing more per share than he has to invest.

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