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 ?
17 (BNA): South Korean consumers' direct purchases of electronics and IT products through overseas online shopping malls came to a record-high level in 2018, data showed.
South Korea's direct purchases from foreign countries rose 31 percent in 2018 from a year earlier on rising consumer demand for cheaper and higher quality products, customs data showed Monday.
The government will also promote parallel imports and overseas direct purchases of manufactured goods in order to offer consumers more choices.
There is no need to issue tenders in direct purchases. We have purchased arms from different places.
Lahore -- Mobilink in collaboration with Gameloft now offers its customers direct purchases from the Gameloft Game Store utilizing Mobilink's operator billing system.
As ArmInfo reported earlier, Yerevan and Moscow are planning to ratify an important agreement, envisaging direct purchases
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.