Direct Investment or Direct Share Purchase Plans

Apparently direct selling of shares isn't a new phenomenon in the USA. According to Peter Lynch in his book Learn to Earn published in the mid-90s, if McDonald's can sell you hamburgers, why can't it sell to you its stock?

The main advantage of this is the significant reduction in brokerage costs. Eliminate the middlemen. You deal directly with the company's stock transfer agent. 

He reasons out that many people, especially young ones who don't have a lot of capital to invest are shut out of the market. Usually, these young people would like to buy just one share to get them started.. He gave an example where in a share of a company is selling at $57..

Most brokerages here in North America have commisions of up to $40 per trade. That's nearly the amount of the share itself. He said that no investor will win by paying $97 for a $57 stock.

In the Philippines, brokerage costs are $0.50 or P20 pesos which makes it very affordable and easy for beginner investors.

For example, you can buy McDonald's shares through its MCDirect Shares Plan in this website:

http://www.aboutmcdonalds.com/mcd/investors/investor_tools/how_to_buy_stock.html

You can buy shares directly and also participate in the dividend reinvestment plan through Computershare, a stock-transfer agent in US and Canada.