Say I hear about a local operation that I think has a chance to make some good profits in the next decade. I would like to invest up to $1000.00 in that company as a sort of one-time gamble for civic pride/fun. The company is traded on the Toronto Stock Exchange (I live in the U.S.). I’m not a day trader and don’t really want to set up a Scott trade account to watch one stock over the course of ten years. I also, don’t have any person managing my regular retirement that could do it.
The simplest way to do it is to set up an account at an online brokerage. You can do it online instantly without filling out any paperwork, and do a direct transfer of money from your bank account, then buy the stock. You can’t really get any simpler than that.
The brokerage will send you the required tax documents.
I use TD Ameritrade, which charges $10 per stock trade and pretty much no other fees. If you create a new account I’m sure you will get a certain number of free trades.
ETA: Apparently TDA does not actually trade shares on the TSX directly, but there are several online brokers that do. See http://www.caseyresearch.com/brokers
Thanks Absolute
I have always just assumed there would be fees or problems from not being active with the account. I guess another way to phrase the question would be; would you feel safe just leaving your Ameritrade account for multiple years without checking it? At some point don’t they have to assume the account is dormant and try and return the money to the investor?
Sometimes there are account maintenance fees. Check the fine print when you set up your account.
They would have to sell the stock to do that and they can’t because you own it and you didn’t tell them to. Maintenance fees for dormancy may be an issue but I doubt it but check it closely anyway. Ten years isn’t a very long investment horizon for stocks and lots of people buy some and hold them many times longer than that. I agree that setting up an online trading account is the easiest way to do this. You could be done with the whole thing in the time it takes to write and respond to this thread. It is meant to be easy unlike the olden days when actual stockbrokers stood between consumers and company shares.
If you really want to avoid account maintenance fees, buy the stock and hold it in the form of a old-fashioned stock certificate, instead of holding it in an online account. I think the disadvantage of holding shares in a paper stock certificate is that selling the shares will be a little more complex than if you simply leave it in an account.
**What is the simplest way to buy stock in a single company, for a long term investment? **
I’ll ask my broker on visiting day.
I know for a fact that Ameritrade has no maintenance fees, it’s one reason I chose them. Just transaction fees.
This is a major PITA today and the inconvenience involved (not to mention extra fees) is just not worth it. You’d have to set up a normal brokerage account, buy the stock, then ask them to send you the certificates (then presumably close the account). Almost all brokerages (including TDA) will charge you to send you the paper certificates.
Pretty sure Scottrade has only transaction fees. $7.00 per trade. I’ve been with them for about ten years.
Now that I’m back at my computer, it looks like Scottrade will do everything you want - no maintenance fees and you can buy shares on the TSX directly.
But since the OP mentions buying it “for civic pride”, it’s probably a local company. So just walk into the company offices and tell them you want to buy some stock. They can sell it to you, give you an actual paper stock certificate, probably won’t charge you any fees at all, and will be happy to do it.
I haven’t touched my Ameritrade account in about 7 years (I just use Vanguard now), and it’s chugging along just fine. No fees or anything so far as I can tell. I check in on it every, oh, six months or so, but I have no activity on the account, other than automatic reinvestment of dividends. It’s not that unusual, when it comes to stocks, to just stick money in an account and then come back 20 or 30 years later.
Be sure to check whether the company has a direct-purchase stock plan before you open a brokerage acct.
Ameritrade will charge maintainance fees, but only if your account goes below a certain value. I’ve forgotten what that value is, but it’s pretty low and most accounts are above it.
Well, the OP talks about only buying a thousand dollars worth of the company’s stock. Is an account of under a thousand dollars subject to a maintenance fee at Ameritrade?
I have an Ameritrade account that I haven’t touched in years. No balance - no stocks - no fees. It just sits there.
If they did anything, they’d (conceivably) turn it over to the state as an inactive account.
However, depending on how you set things up, there would usually be dividends posting to the account - and either being held as cash (earning a penny or two a year in interest) or being reinvested; the handful of single stocks we hold at Fidelity get automatically reinvested and they don’t charge a fee. Anyway - the account won’t be completely inactive.
ScottTrade or any of the big online houses should be able to handle the purchase; one of our stocks is a Brazilian company, and if they can handle Brazil I’m sure they can handle Canada.
They’ll also take care of foreign taxes as appropriate - every quarter we get about 8 bucks in dividends, of which 1.50 or so gets remitted to Brazil (and we get a tax credit for that when we do our 1040 the next year).
Thanks everybody for your posts, it has been helpful.
I’m off to make my million
Why not just buy directly from the company, or at least their brokerage? That’s how all of my stocks are handled. This way you don’t need to find a second brokerage to handle the deals for you. If you know what you want then you shouldn’t have a problem this way.