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.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved
To buy shares of a mutual fund directly from the fund rather than from an intermediary such as a broker or financial planner. Mutual funds that sell directly to investors do not have sales personnel and generally charge no sales fee or a relatively small sales fee.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.