direct investment

(redirected from Direct Purchases)

Direct investment

The purchase of a controlling interest in a company or at least enough interest to have enough influence to direct the course of the company.

Direct Investment

The act or practice of buying stock in a publicly-traded company without using a broker as an intermediary. Perhaps the most common means of direct investment is dividend reinvestment, which is the act of using one's dividends to buy more shares in the same company. Some companies also offer plans called direct purchase plans, which allow investors to bypass their broker. However, direct purchase plans are rather illiquid (it is difficult to sell one's shares without a broker), and are therefore bought for long-term investing.

Direct investment.

You can make a direct investment in a company's stock through dividend reinvestment plans (DRIPs) and direct purchase plans (DPPs).

If a company in which you own stock offers a DRIP, you have the opportunity to reinvest cash dividends and capital gains distributions in more stock automatically each time they are paid.

In the case of DPPs, also known as direct stock purchase plans (DSPs), companies can sell their stock directly to investors without using a brokerage firm as intermediary.

Direct investment also refers to long-term investments in limited partnerships that invest in real estate, leased equipment, and energy exploration and development. In this type of investment, you become part owner of the hard assets of the enterprise.

You realize income from your investment by receiving a portion of the business's profits, for example, from rents, contractual leasing payments, or oil sales. In some cases you realize capital gains at the end of the investment term, if the business sells its assets.

These DPPs are largely nontraded and have no formal secondary markets. This means you will often have to hold the investment for terms of eight years or more, with no guarantee that any of the income or capital gains will materialize.

Many people make direct investments because there can be significant tax benefits, such as tax deferral and tax abatement, depending on the investment.

direct investment


direct investment

any expenditure on physical ASSETS such as plant, machinery and stocks. See INVESTMENT.
References in periodicals archive ?
The government will also promote parallel imports and overseas direct purchases of manufactured goods in order to offer consumers more choices.
Split purchases disguised as direct purchases and excessive use of the purchase exception, are standards in the practice of Contracts Law by Guatemalan state institutions, according to an investigation on ElPeriodico.
The new office will enable Hemtex to increase its direct purchases from manufacturers, as well as to oversee the adherence by suppliers to Hemtex's ethical guidelines.
Pozin says that companies shifted sweep assets into deposit accounts and direct purchases of overnight investments such as repurchase agreements, eurodollars and money market mutual funds.
In the past, our technologies and services were primarily available to commercial organizations and a few select government organizations through limited direct purchases," stated Chris Spencer, CEO of Wizzard Software.
Direct purchases can now be recorded and tracked within the system in order to maintain more accurate general ledger and audit information.
Next, economist Paul Krugman and others have suggested that the Bank of Japan (BOJ) should print money, possibly by direct purchases of government bonds, to raise expectations of future inflation, thus driving real interest rates lower.
The team carefully reviewed the plans and specifications to identify potential direct purchases that would yield the greatest economies through first-cost savings and tax exemptions.
Acquisitions are accomplished through conservation easements, land swaps and direct purchases, and land trust purchases.
AIT has created more than 236 IT jobs, made a direct capital investment of $5,800,000 on the Corporate Headquarters, completed a payroll investment of $22,000,000, and made direct purchases of $8,200,000 from state and local vendors.
The new fund will be available for direct purchases as well as through multiple intermediaries and fund supermarket platforms.
In implementing our investment policies, we sought to invest a large percentage of this capital through direct placements with MLPs and their affiliates," said David Schulte, CEO of Tortoise Energy Capital Corporation, "and over 70% of these funds were invested through direct purchases.